-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IV420YJBV5y7thNH/I4FxL8zZHuZgy5YBihm0B9dD0pjUWfnglEevYPZvRoRgVkt IPBDVZA81LJ7v/YoFT8LcQ== 0000903423-03-000331.txt : 20030331 0000903423-03-000331.hdr.sgml : 20030331 20030331172036 ACCESSION NUMBER: 0000903423-03-000331 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20030320 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20030331 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MS STRUCTURED ASSET CORP CENTRAL INDEX KEY: 0001071246 STANDARD INDUSTRIAL CLASSIFICATION: ASSET-BACKED SECURITIES [6189] IRS NUMBER: 134026700 STATE OF INCORPORATION: DE FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-16443 FILM NUMBER: 03632038 BUSINESS ADDRESS: STREET 1: 1585 BROADWAY CITY: NEW YORK STATE: NY ZIP: 10036 BUSINESS PHONE: 2127611715 FORMER COMPANY: FORMER CONFORMED NAME: MSDW STRUCTURED ASSET CORP DATE OF NAME CHANGE: 19980929 8-K 1 msdw8k2_03-31.txt SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ----------------------- FORM 8-K ----------------------- CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported): March 20, 2003 MS Structured Asset Corp. - -------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in Charter) Delaware 333-64879 13-4026700 - -------------------------------------------------------------------------------- (State or Other Jurisdiction (Commission File (IRS Employer of Incorporation) Number) Identification No.) 1585 Broadway, New York, New York 10036 - -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: 212-761-2520 Not Applicable - -------------------------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) Item 7. Financial Statements, Pro Forma Financial Information and Exhibits Exhibit 4.1 Trust Agreement Exhibit 5.1 Validity Opinion of Cleary, Gottlieb, Steen & Hamilton Exhibit 23.1 Consent of Cleary, Gottlieb, Steen & Hamilton (included in Exhibit 5.1) SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereto duly authorized. Date: March 31, 2003 MS STRUCTURED ASSET CORP. (Registrant) By: /s/ John Kehoe ---------------------- Name: John Kehoe Title: Vice President EXHIBIT INDEX Exhibit 4.1 Trust Agreement Exhibit 5.1 Validity Opinion of Cleary, Gottlieb, Steen & Hamilton Exhibit 23.1 Consent of Cleary, Gottlieb, Steen & Hamilton (included in Exhibit 5.1) EX-4.1 3 msdw8kex41_03-31.txt TRUST AGREEMENT TRUST AGREEMENT, between MS Structured Asset Corp. (the "Depositor") and LaSalle Bank National Association (the "Trustee"), made as of the date set forth in Schedule I attached hereto, which Schedule together with Schedules II and III attached hereto, are made a part hereof. The terms of the Standard Terms for Trust Agreements, dated March 5, 2003 (the "Standard Terms") are, except to the extent otherwise expressly stated, hereby incorporated by reference herein in their entirety with the same force and effect as though set forth herein. Capitalized terms used herein and not defined shall have the meanings defined in the Standard Terms. References to "herein", "hereunder", "this Trust Agreement" and the like shall include the Schedule I attached hereto and the Standard Terms so incorporated by reference. WHEREAS, the Depositor and the Trustee desire to establish the Trust identified in Schedule I attached hereto (the "Trust") for the primary purposes of (i) holding the Underlying Securities, (ii) entering into any Swap Agreement with the Swap Counterparty and (iii) issuing the Units; WHEREAS, the Depositor desires that the respective beneficial interests in the Trust be divided into transferable fractional shares, such shares to be represented by the Units; WHEREAS, the Depositor desires to appoint the Trustee as trustee of the Trust and the Trustee desires to accept such appointment; WHEREAS, the Depositor shall transfer, convey and assign to the Trust without recourse, and the Trust shall acquire, all of the Depositor's right, title and interest in and under the Underlying Securities and other property identified in Schedule II to the Trust Agreement (the "Trust Property"); and WHEREAS, the Trust agrees to acquire the Trust Property specified herein in consideration for Units having an initial Unit Principal Balance identified in Schedule I attached hereto, subject to the terms and conditions specified in the Trust Agreement; NOW THEREFORE, the Depositor hereby appoints the Trustee as trustee hereunder and hereby requests the Trustee to receive the Underlying Securities from the Depositor and to issue in accordance with the instructions of the Depositor Units having the terms specified in Schedule I attached hereto, and the Trustee accepts such appointment and, for itself and its successors and assigns, hereby declares that it shall hold all the estate, right, title and interest in any property contributed to the trust account established hereunder (except property to be applied to the payment or reimbursement of or by the Trustee for any fees or expenses which under the terms hereof is to be so applied) in trust for the benefit of all present and future Holders of the fractional shares of beneficial interest issued hereunder, namely, the Unitholders, and subject to the terms and provisions hereof. IN WITNESS WHEREOF, each of the undersigned has executed this instrument as of the date set forth in the Schedule I attached hereto. LASALLE BANK NATIONAL ASSOCIATION as Trustee on behalf of the Trust identified in Schedule I hereto, and not in its individual capacity By: /s/ Ann M. Kelly ---------------------------- Name: Ann M. Kelly Title: Assistant Vice President MS STRUCTURED ASSET CORP. By: /s/ John Kehoe ---------------------------- Name: John Kehoe Title: Vice President Attachments: Schedules I, II and III Schedule I (Terms of Trust and Units) Trust: SATURNS Trust No. 2003-4 Date of Trust Agreement: March 20, 2003 Trustee: LaSalle Bank National Association Units: The Trust will issue two classes of Units: the Class A Units and the Class B Units. Only the Class A Units will be publicly offered. Initial Unit Principal Balance of the Class A Units: $25,975,000 Initial Notional Amount of the Class B Units: $25,975,000 Issue Price of Units: Class A Units: 100% Class B Units: $2,216,000 Number of Units: Class A Units: 1,039,000 (Unit Principal Balance of $25 each) Class B Units: As specified by the Depositor Minimum Denomination: Class A Units: $25 and $25 increments in excess thereof. Each $25 of Unit Principal Balance is a Unit. Class B Units: $100,000 and $1,000 increments in excess thereof. Cut-off Date: March 20, 2003 Closing Date: March 20, 2003 Specified Currency: United States dollars Business Day: New York, New York and Chicago, Illinois Interest Rate: Class A Units: 6.375% per annum on the basis of a 360 day year consisting of twelve 30 day months. Class B Units: 0.9499% per annum on the basis of a 360 day year consisting of twelve 30 day months. The right of the Class A Units to accrued interest is pari passu with the right of the Class B Units to accrued interest from accrued interest on the securities. Interest Reset Period: Not Applicable Rating: Class A Units: A3 by Moody's A- by S&P Rating Agencies: Moody's and S&P Scheduled Final Distribution Date: November 1, 2029. The Units will have the same final maturity as the Underlying Securities. Prepayment/Redemption: The Trust Property is subject to call in accordance with Schedule III. Any such call will cause a redemption of a corresponding portion of the Class A Units and a proportional reduction in the Notional Amount of the Class B Units. If the call rights under the Swap Agreement are partially exercised, (i) the Trustee will randomly select Class A Units to be redeemed in full from the proceeds of such partial exercise of the Swap Agreement and (ii) the Trustee will first redeem, up to a Notional Amount equal to the principal amount of Underlying Securities subject to such exercised call, Class B Units held by any Swap Counterparty who has exercised its call rights under the Swap Agreement and then by random selection. If sufficient funds are not available to redeem each such redeemed Unit in full, one Unit may be fractionally redeemed as a result of each such partial exercise. Additional Distribution: Class A Units: If the Underlying Security Issuer gives notice of a self-tender as to Underlying Securities held by the Trust and a Swap Counterparty exercises its call rights under a Swap Agreement in connection with such self-tender prior to March 20, 2008, each redeemed Class A Unitholder shall receive an additional distribution of $1.50 per Class A Unit from the proceeds of such exercise in respect of principal, price or premium with respect to the Underlying Securities in excess of the corresponding Unit Principal Balance of the Class A Units to be redeemed. Class B Units: If a Swap Counterparty exercises its call rights under the Swap Agreement, then the Class B Units designated for a reduction in Notional Amount in connection with such exercise shall receive an amount equal to the Class B Present Value Amount as of the date of such reduction in Notional Amount as an additional distribution from any Class B Unit Payment Obligation as payable under the Swap Agreement in connection with such exercise, as applicable. In no event will amounts payable on the Class B Units under this provision exceed the Class B Present Value Amount. "Class B Present Value Amount" means, with respect to a date, an amount equal to the present value of the Future Class B Unit Interest for such date in respect of the corresponding portion of the Notional Amount of the Class B Units being reduced discounted at a rate of 7.375% per annum on the basis of a 360 day year consisting of twelve 30 day months. "Future Class B Unit Interest" means with respect to any date of reduction in the Notional Amount of the Class B Units resulting from an exercise of call rights under the Swap Agreement, the interest on the corresponding portion of the Notional Amount of the Class B Units, other than interest paid or accrued through such date, that would accrue at the rate and in the manner specified hereunder and would be payable at the times specified hereunder on such corresponding portion of the Notional Amount of the Class B Units to the Scheduled Final Distribution Date had such reduction of the Notional Amount of the Class B Units not occurred. Swap Agreement: The ISDA Master Agreement referred to in Schedule III and any assignment thereof. Swap Counterparty: Party A to the Swap Agreement referred to in Schedule III or any assignee thereof. In the event of a self-tender for the Underlying Securities the Trustee shall tender to the Underlying Security Issuer an amount of the Underlying Securities equal to the total number of options exercised, and shall apply the proceeds of such tender in cash settlement of such options as provided in the Swap Agreement; provided, however, that to the extent any amount of Underlying Securities tendered is not accepted by the Underlying Security Issuer and paid for in accordance with the terms of the tender offer, such options relating to the Underlying Securities so tendered and not accepted shall be deemed rescinded and no settlement thereof shall be deemed to have occurred, with the number of such rescinded options to be allocated among the Swap Counterparties in proportion to the number of options initially exercised (and each Swap Counterparty shall be entitled to exercise such rescinded options in the future). Swap Termination Payment: With respect to each $1,000 face amount of Underlying Securities and each corresponding option under the Swap Agreement, an amount equal to the excess (if any) of the sale proceeds of the Underlying Securities, reduced by (x) accrued interest on the Underlying Securities, (y) the $1,000 of Unit Principal Balance of the Class A Units and the Class B Present Value Amount with respect to $1,000 of the Notional Amount of Class B Units to be redeemed in relation to such sale and (z) any additional distribution on the Class A Units to be redeemed in relation to such sale or distribution. Swap Notional Amount: The notional amount specified in Schedule III. Swap Payment Date: Not Applicable Swap Rate: Not Applicable Distribution Date: Each May 1 and November 1, or the next succeeding Business Day if such day is not a Business Day, commencing May 1, 2003, and any other date upon which funds are available for distribution in accordance with the terms hereof. If any payment with respect to the Underlying Securities held by the Trust is not received by the Trustee by 12 noon (New York City time) on a Distribution Date, the corresponding distribution on the Units will not occur until the next Business Day that the Trust is in receipt of proceeds of such payment prior to 12 noon, with no adjustment to the amount distributed or the Record Date. Record Date: The record date for each Distribution Date shall be the third Business Day prior to such Distribution Date, without adjustment for any change in the Distribution Date due to the receipt of funds for distribution after 12 noon. Form: Global Security Depositary: DTC Trustee Fees and Expenses: As compensation for and in payment of trust expenses related to its services hereunder other than Extraordinary Trust Expenses, the Trustee will receive Trustee Fees on each Distribution Date in the amount equal to $2,000. The Trustee Fee shall cease to accrue after termination of the Trust. The "Trigger Amount" with respect to Extraordinary Trust Expenses for the Trust is $25,000 and the Maximum Reimbursable Amount is $100,000. The Trustee Fee will be paid by the Expense Administrator. Expenses will be reimbursed by the Expense Administrator in accordance with the Expense Administration Agreement. Expense Administrator: The Trustee will act as Expense Administrator on behalf of the Trust pursuant to an Expense Administration Agreement, dated as of the date of the Trust Agreement (the "Expense Administration Agreement"), between the Trustee as Expense Administrator (the "Expense Administrator") and the Trust. The Expense Administrator will receive a fee equal to $6,507 payable on each Distribution Date. Amounts in respect of an additional payment obligation of the Swap Counterparty in respect of the Expense Administrator's fee shall also be considered part of the Expense Administrator's fee hereunder and under the Expense Administration Agreement. The Expense Administrator's fee is payable only from available interest receipts received with respect to the Underlying Securities after application of such receipts to payment of accrued interest on the Units. The Amounts specified in the paragraph are also referred to as the "Expense Administrator's Fee". The Expense Administrator will be responsible for paying the Trustee Fee and reimbursing certain other expenses of the Trust in accordance with the Expense Administration Agreement. Listing: The Depositor has applied to list the Class A Units on the New York Stock Exchange. ERISA Restrictions: With respect to the Class A Units, no ERISA Restrictions apply. With respect to the Class B Units, the No Plan Restriction applies. QIB Restriction: Not applicable to the Class A Units. Applicable to the Class B Units. Trust Wind-Up Event: If (i) cash settlement applies under the Swap Agreement (other than in connection with a self-tender by the Underlying Security Issuer for the Underlying Securities), (ii) a Trust Wind-Up Event has occurred in connection with the exercise of any call rights under the Swap Agreement and (iii) the Selling Agent cannot obtain a bid for the Underlying Securities in excess of 100% of the aggregate Unit Principal Balance of the Units and accrued interest on the Underlying Securities, then the Underlying Securities will not be sold, the Swap Counterparty's exercise of the call rights will be rescinded (and the Swap Counterparty shall be entitled to exercise such options in the future) and any related Trust Wind-Up Event will be deemed not to have occurred. Termination: If a Trust Wind-Up Event occurs, any Underlying Securities held by the Trust will be liquidated (pursuant to the terms of the Swap Agreement in the event of an exercise of options under the Swap Agreement or otherwise by sale thereof). If the related Trust Wind-Up Event occurs due to an exercise of the call rights under the Swap Agreement as to all Underlying Securities held by the Trust, (i) amounts received as accrued interest on the Underlying Securities will be applied to amounts treated as accrued interest outstanding on the Class A Units and the Class B Units, (ii) amounts received as principal or par on the Underlying Securities (including any portion of the Strike Price (as defined in the Swap Agreement) will be applied to the Unit Principal Balance of the Class A Units up to 100% of the Unit Principal Balance of each Class A Unit and (iii) any additional amounts received in respect of principal, price or premium (or any portion of the Strike Price in excess of the amount in (ii)) will be in each case applied first to the Class A Units as an additional distribution and second to the Class B Units as an additional distribution in the event of any payment in connection with any redemption, but only up to the amount specified under "Additional Distributions" in this Trust Agreement. Notwithstanding the foregoing, any Class B Unit Payment Obligation made by the Swap Counterparty under the Swap Agreement will be distributed to the Class B Units as set forth under "Additional Distributions". Remaining accrued interest will be applied to the Expense Administrator's fee. Amounts in respect of an additional payment obligation of each Swap Counterparty in respect of the Expense Administrator's Fee will be paid to the Expense Administrator. Remaining amounts will be allocated to any applicable additional distribution on the Class B Units and then to the Swap Termination Payment. If the Trust is terminated for any other reason, the proceeds of liquidation will be applied to redeem the Class A Units, up to their stated principal balance, and the Class B Units. The Class A Units will have a claim on the proceeds of the liquidation equal to their aggregate Unit Principal Balance plus accrued interest. The Class B Units will have a claim on the proceeds of liquidation equal to accrued interest plus the Class B Present Value Amount, in each case as of such date of termination. If the proceeds of the liquidation are less than the combined claim amounts of the Class A Units and the Class B Units, the proceeds will be distributed in proportion to the claim amounts of the Class A Units and the Class B Units in full satisfaction of the claims of the Units. If the proceeds of liquidation exceed the stated principal balance of the Class A and the Class B Present Value of the Class B Units and the accrued interest on the Underlying Securities, the excess will be paid to the Swap Counterparty as a Swap Termination Payment under the Swap Agreement, other than amounts payable to the Expense Administrator in respect of the Expense Administrator's Fee. Self-Tenders by Underlying Security Issuer: The Trust will not participate in any self-tender by the Underlying Security Issuer for the Underlying Securities and the Trustee will not accept any instructions to the contrary from the Unitholders, except in connection with an exercise by a Swap Counterparty of its call rights. Any Swap Counterparty may exercise its call rights in connection with any self-tender in accordance with the Swap Agreement and the Trustee may participate in the self tender by the Underlying Security Issuer on behalf of an exercising Swap Counterparty. Depositor Optional Exchange: Depositor Optional Exchange applies to this Series of Units. Section 5.12(c)(ii) of the Standard Terms shall be incorporated herein by replacing 5.12 (c)(ii) with the following: "(ii) such exchange is to be effected on any Distribution Date or any date that is 90 days before or after a Distribution Date (or the succeeding Business Day if such date is not a Business Day) with 45 days notice". Pursuant to 5.12(c)(iii) each Swap Counterparty and the Expense Administrator must consent to such an exchange. Terms of Retained Interest: Notwithstanding any other provision herein or in the Standard Terms, the Depositor retains the right to receive any and all interest that accrues on the Underlying Securities prior to the Closing Date. The Depositor will receive such accrued interest on the first Distribution Date (or redemption date if earlier) for the Units and such amount shall be paid from the interest payment made with respect to the Underlying Securities on the first Distribution Date. The amount of the Retained Interest is $724,632. If an Underlying Security Default occurs on or prior to the first Distribution Date and the Depositor does not receive such Retained Interest amount in connection with such Distribution Date, the Depositor will have a claim for such Retained Interest, and will share pro rata with holders of the Units to the extent of such claim in the proceeds from the recovery on the Underlying Securities. Call Option Terms: Not Applicable. Sale of Underlying Securities: If the Swap Counterparty is not an affiliate of the Selling Agent, the Selling Agent will extend a right of first refusal to each Swap Counterparty to purchase the Underlying Securities at the highest bid received by the Selling Agent. If more than one Swap Counterparty exercises such right of first refusal, Underlying Securities will be sold to each exercising Swap Counterparty in proportion to the number of options held by such Swap Counterparty; provided, that if only one Swap Counterparty exercises such right of first refusal, such Swap Counterparty shall be entitled to purchase all of the Underlying Securities to be sold by the Selling Agent. If cash settlement applies and if the Swap Counterparty exercises any of its call rights other than in connection with a self-tender for the Underlying Securities by the Underlying Security Issuer (or extent thereof in the event of an exercise of call rights in excess of the amount to be redeemed), a number of Underlying Securities corresponding to the number of call rights exercised by the Swap Counterparty will be sold by the Selling Agent on behalf of the Trust. If the Selling Agent cannot obtain a bid for the Underlying Securities in excess of the amount specified in the Swap Agreement, then the Underlying Securities will not be sold, the Swap Counterparty's exercise, will be rescinded (and the Swap Counterparty shall be entitled to exercise such call rights in the future) and any related Trust Wind-Up Event will be deemed not to have occurred. Selling Agent: Morgan Stanley & Co. Incorporated. Rating Agency Condition: The definition of Rating Agencies Condition in the Standard Terms shall not apply. "Rating Agency Condition": With respect to any specified action or determination, means receipt of (i) written confirmation by Moody's (if the Units are rated by Moody's, for so long as the Units are outstanding and rated by Moody's) and (ii) written confirmation by S&P (if the Units are rated by S&P, for so long as the Units are outstanding and rated by S&P), that such specified action or determination will not result in the reduction or withdrawal of their then-current ratings on the Units. Such satisfaction may relate either to a specified transaction or may be a confirmation with respect to any future transactions which comply with generally applicable conditions published by the applicable rating agency. Schedule II (Terms of Trust Property) Underlying Securities: Dow Chemical Company 7.375% debentures due November 1, 2029 Underlying Security Issuer: Dow Chemical Company Principal Amount: $25,975,000 Underlying Security Rate: 7.375% Credit Ratings: A3 by Moody's A- by S&P Listing: None Underlying Security Issuance Agreement: An indenture dated as of April 1, 1992 between the Underlying Security Issuer and the Underlying Security Trustee as supplemented and amended from time to time. Form: Global Currency of Denomination: United States dollars Acquisition Price by Trust: $27,837,725 Underlying Security Payment Date: Each May 1 and November 1 Original Issue Date: The Underlying Securities were issued on or about November 9, 1999. Maturity Date: November 1, 2029 Sinking Fund Terms: Not Applicable Redemption Terms: Not Applicable CUSIP No.:/ISIN No. 260543BJ1 Underlying Security Trustee: The First National Bank of Chicago Available Information Regarding the Underlying Security Issuer (if other than U.S. Treasury obligations): The Underlying Security Issuer is subject to the informational requirements of the Securities Exchange Act of 1934, as amended, and in accordance therewith files reports and other information with the Securities and Exchange Commission (the "Commission"). Such reports and other information can be inspected and copied at the public reference facilities maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 and at the following Regional Offices of the Commission: Woolworth Building, 233 Broadway, New York, New York 10279, and Northwest Atrium Center, 500 West Madison Street, Chicago, Illinois 60661. Copies of such materials can be obtained from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Washington, District of Columbia 20549 at prescribed rates. Schedule III (Call Option Confirm) - -------------------------------------------------------------------------------- Date: March 20, 2003 To: SATURNS Trust No. 2003-4 From: Morgan Stanley & Co. International Limited Attn: Asset-Backed Securities Group Contact: Chris Boas SATURNS Trust No. 2003-4 Fax: 312-904-2084 Fax: 212-761-0406 Tel: 312-904-9387 Tel: 212-761-1395 - -------------------------------------------------------------------------------- Re: Bond Option Transaction. MS Reference Number SQ28D The purpose of this letter agreement is to confirm the terms and conditions of the Transaction entered into between you and Morgan Stanley & Co. International Limited ("MSIL"), with Morgan Stanley & Co. Incorporated ("MS&Co."), as agent, on the Trade Date specified below (the "Transaction"). This letter agreement constitutes a "Confirmation" as referred to in the Agreement below. The definitions and provisions contained in the 1997 ISDA Government Bond Option Definitions as published by the International Swaps and Derivatives Association, Inc. ("ISDA") are incorporated into this Confirmation and this transaction shall be deemed a "Government Bond Option Transaction" for purposes of such definitions. In the event of any inconsistency between those definitions and this Confirmation, this Confirmation will govern. 1. This Confirmation supplements, forms a part of, and is subject to, the ISDA Master Agreement dated as of the date hereof, as amended and supplemented from time to time (the "Agreement"), between you and us. All provisions contained in the Agreement govern this Confirmation except as expressly modified below. 2. The terms of the particular Transaction to which this Confirmation relates are as follows: I. General Terms Trade Date: March 20, 2003 Option Style: American Option Type: Call Buyer: MSIL ("Party A") Seller: SATURNS Trust No. 2003-4 ("Party B") Bonds: The obligation identified as follows: Bond Issuer: Dow Chemical Company Issue: 7.375% debentures due 2029 CUSIP: 260543BJ1 Coupon: 7.375% Maturity Date: November 1, 2029 Face Amount Purchased: USD 25,975,000 Premium: USD $64,938 Premium Payment Date: March 20, 2003 Number of Options: 25,975 Option Entitlement: USD 1,000 of face amount of the Bonds per Option. Strike Price: (i) For any Exercise Date prior to March 20, 2008, 106%, in the case of an exercise related to a self-tender by the Bond Issuer for Bonds held by the Trust, of the corresponding portion of the face amount of the Bonds, but exclusive of accrued interest on the Bonds or (ii) for any Exercise Date on or after March 20, 2008, 100% of the face amount of the Bonds exclusive of accrued interest. Calculation Agent: Party A II. Exercise Terms Automatic Exercise: Inapplicable Exercise Period: Any Business Day from, and including, 9:00 a.m. (New York time) on March 20, 2008, to, and including, the Expiration Time on the Expiration Date; provided, however, the Exercise Period shall also include any Business Day prior to March 20, 2008, if notice of redemption or self-tender has been delivered by the Bond Issuer as to Bonds held by the Trust. Exercise Date: For each Option exercised, the day during the Exercise Period on which that Option is exercised. Rescission of Exercise: Party A may rescind its notice of exercise at any time prior to the Settlement Date by providing notice of rescission to Party B. If Cash Settlement applies and if Party B cannot obtain a bid for the Bonds held by it in excess of the Strike Price together with accrued interest on the Bonds, then Party A's notice of exercise shall be rescinded. If Cash Settlement applies and Party A exercises its Options in connection with a self-tender for settlement prior to March 20, 2008, Party A's notice of exercise shall be automatically rescinded if the price offered by the Bond Issuer does not exceed the Strike Price together with accrued interest on the Bonds. Upon any rescission of exercise (whether pursuant to the foregoing sentence or otherwise) the Options for which notice of exercise was given and for which exercise was rescinded shall continue in full force and effect without regard to such provision of notice. Any Options exercised under this Transaction may be deemed rescinded to the extent so provided under Schedule I to the Trust Agreement. Multiple Exercise: Applicable Minimum Number of Options: 1 Written Confirmation of Exercise: Applicable. Buyer shall give exercise notice which may be given orally (including by telephone) during the Exercise Period but no later than the Notification Date. Buyer will execute and deliver a written exercise notice confirming the substance of such oral notice, however, failure to provide such written notice will not affect the validity of the oral notice. Limitation on Rights of MSIL: Buyer may, by written notice thereof to Seller, delegate its rights to provide a notice of exercise hereunder to a third party (the "Third Party"). Any such delegation will be irrevocable by Buyer without the written consent of the Third Party. Any such Third Party will have the same rights and obligations regarding providing notice of exercise hereunder as the Buyer had prior to such delegation. While any such delegation is effective, Seller will only recognize a notice of exercise that is provided by the Third Party. Notification Date: The Swap Counterparty may give notice of its intention to exercise the call rights under the Swap Agreement on not less than 15 or more than 60-calendar days' notice. The Swap Counterparty may give notice of its intention to exercise its call rights under the Swap Agreement with respect to Bonds held by the Trust as to which the Bond Issuer has given notice of a self-tender with two business days notice prior to the settlement of exercise but no later than 4:00 p.m. New York time on the second Business Day immediately preceding the scheduled settlement of the self-tender. Limited Right to Confirm Exercise: Inapplicable Expiration Date: November 1, 2026 Expiration Time: 4:00 p.m. New York time Business Days: New York and Chicago III. Settlements: Settlement: Cash Settlement if MSIL is Party A or if the Options are exercised in connection with a self-tender; otherwise Physical Settlement. Party A will notify Party B separately regarding the clearance system details for Physical Settlement. Spot Price (Cash Settlement Only): The cash proceeds received by Party B in connection with sale of the Bonds by Party B, excluding any amounts in respect of accrued interest. In the event of a self-tender by the Bond Issuer, the self tender price, as applicable, paid by the Bond Issuer, excluding accrued interest. Cash Settlement Amount (Cash The Cash Settlement Amount shall be Settlement Only): adjusted to reflect the Additional Payment Obligation of Party A. Bond Payment (Physical Settlement The Bond Payment shall also include the Only): Additional Payment Obligation of Party A. Deposit of Bond Payment (Physical Party A must deposit the Bond Payment with Settlement Only): the Trustee on the Business Day prior to the Exercise Date. The Bonds are to be delivered "free" to Party A. Additional Payment Obligation of To the Expense Administrator(the "Expense Party A: Administrator Payment Obligation"): If any exercise of Options hereunder is an exercise of less than all Options remaining unexercised hereunder, Party A shall pay to the Expense Administrator an amount equal to the present value of a stream of payments equal to $6,507 payable on each payment date for the Bonds until the maturity of the Bonds discounted at a rate of 5% per annum on the basis of a 360 day year consisting of twelve 30 day months from the date of such exercise until the Scheduled Final Distribution Date (as defined in the Trust Agreement), assuming for this purpose that the Trust (as defined in the Trust Agreement) is not terminated prior to the Scheduled Final Distribution Date, multiplied by the Option Entitlement multiplied by the number of Options exercised and divided by $25,975,000. To Party B for Payment on the Class B Units (the "Class B Unit Payment Obligation"): Upon any exercise hereunder, Party A shall pay to Party B, for distribution with respect to the Class B Units outstanding under the Trust Agreement, the Class B Present Value Amount (as defined in the Trust Agreement). Settlement Date: For Cash Settlement, as applicable, the Business Day of settlement of the sale of the Bonds by Party B or the Business Day of settlement of a self tender. For Physical Settlement, the Exercise Date. 3. Additional Definitions. "Expense Administration Agreement" means the expense administration agreement dated as of the date hereof between Party B and the Expense Administrator. "Expense Administrator" means LaSalle Bank National Association acting pursuant to the "Expense Administration Agreement". "Trust Agreement" means the trust agreement dated as of the date hereof between the MS Structured Asset Corp. and LaSalle Bank National Association. 4. Representations. Morgan Stanley & Co. Incorporated is acting as agent for both parties but does not guarantee the performance of Party A. 5. Additional Termination Event. As set forth in the Agreement, a Trust Wind-Up Event will result in an Additional Termination Event under the Agreement with respect to which Party B shall be the Affected Party and this Transaction shall be an Affected Transaction. A redemption by the Bond Issuer of a portion of the Bonds held by Party B will result in a partial Additional Termination Event to the extent of the Bonds being so redeemed (or, to the extent there are multiple Swap Counterparties, to such portion of the Bonds being redeemed allocable to the options held by Party A) if Party A does not exercise Options hereunder corresponding to such Bonds. 6. Swap Termination Payments. In the event an Early Termination Date is designated with respect to which this Transaction is an Affected Transaction, there shall be payable to Party A as a termination payment for each option so terminated in lieu of the termination payment determined in accordance with Section 6(e) of the Agreement, the amount specified as the Swap Termination Payment in the Trust Agreement. 7. Assignment. The rights under this Confirmation and the Agreement may be assigned at any time and from time to time in whole or in part; provided that the Rating Agency Condition (as defined in the Trust Agreement) is satisfied with respect to such assignment and any transfer. The transferee in any such assignment or transfer must be a qualified institutional buyer as defined in Rule 144A under the Securities Act of 1933, as amended. 8. Account Details. Payments to Party A: Citibank, N.A., New York SWIFT BIC Code: CITIUS33 ABA No. 021 000 089 FAO: Morgan Stanley & Co. International Limited Account No. 3042-1519 Operations Contact: Barbara Kent Tel 212-537-1449 Fax 212-537-1868 Payments to Party B: LaSalle Bank, Chicago, Illinois ABA No. 071 000 505 Reference: SATURNS 2003-4 Unit Account / AC-2090067/ Account No.: 67-9180-505 Operations Contact: Andy Streepey Tel: 312-904-9387 Fax: 312-904-2084 Please confirm that the foregoing correctly sets forth the terms of our agreement MS Reference Number SQ28D by executing this Confirmation and returning it to us. Best Regards, MORGAN STANLEY & CO. INTERNATIONAL LIMITED BY: /s/ John Kehoe ------------------------- Name: John Kehoe Title: Attorney in fact Acknowledged and agreed as of the date first written above: SATURNS TRUST NO. 2003-4 BY: LaSalle Bank National Association, solely as Trustee and not in its individual capacity. BY: /s/ Ann M. Kelly ------------------------ Name: Ann M. Kelly Title: Assistant Vice President MORGAN STANLEY & CO. INCORPORATED hereby agrees to and acknowledges its role as agent for both parties in accordance with the Schedule to the Agreement. BY: /s/ John Kehoe ------------------------- Name: John Kehoe Title: Attorney in fact EX-5.1 4 msdw8kex51_03-31.txt [Letterhead of Cleary, Gottlieb, Steen & Hamilton] March 20, 2003 Morgan Stanley & Co. Incorporated 1585 Broadway New York, New York 10036 MS Structured Asset Corp. 1585 Broadway New York, New York 10036 Ladies and Gentlemen: We have acted as special counsel to MS Structured Asset Corp. (the "Depositor") in connection with the formation of Structured Asset Trust Unit Repackagings ("SATURNS") Trust No. 2003-4 (the "Trust"), the issuance by the Trust of $25,975,000 principal amount of Class A Units (the "Class A Units"), and the offer and sale of the Class A Units by the Underwriter. The Class A Units are offered pursuant to a registration statement on Form S-3 (No. 333-101155). Such registration statement, as amended when it became effective, but excluding the documents incorporated by reference therein, is herein called the "Registration Statement," and the related prospectus, as supplemented by the prospectus supplement dated March 18, 2003, and as first filed with the Securities and Exchange Commission pursuant to Rule 424(b)(2) under the Securities Act, but excluding the documents incorporated by reference therein, is herein called the "Prospectus." The Trust is organized under the laws of the State of New York, pursuant to the Trust Agreement, dated March 20, 2003 (the "Trust Agreement"), between LaSalle Bank National Association, as trustee (the "Trustee") and the Depositor, which Trust Agreement, to the extent provided therein, incorporates by reference the Standard Terms referenced therein. In arriving at the opinions expressed below, we have reviewed the following documents: (a) the Registration Statement and the related Prospectus and the documents incorporated by reference therein; (b) the Trust Agreement; and (c) forms of the Class A Units. In addition, we have reviewed the originals or copies certified or otherwise identified to our satisfaction of all such corporate records of the Depositor and such other instruments and other certificates of public officials, officers and representatives of the Depositor and such other persons, and we have made such investigations of law, as we have deemed appropriate as a basis for the opinions expressed below. In rendering the opinions expressed below, we have assumed the authenticity of all documents submitted to us as originals and the conformity to the originals of all documents submitted to us as copies. In addition, we have assumed and have not verified the accuracy as to factual matters of each document we have reviewed (including, without limitation, the accuracy of the representations and warranties of the Depositor in the Standard Terms). Based on the foregoing, and subject to the further assumptions and qualifications set forth below, it is our opinion that: 1. Assuming that the Trust Agreement has been duly authorized by all necessary action of, and duly executed and delivered by the Depositor and Trustee, the Trust Agreement is a valid, binding and enforceable obligation of the Depositor; and 2. Assuming that the Trust Agreement has been duly authorized by all necessary action of, and duly executed and delivered by, the Depositor and the Trustee and that the Class A Units have been duly executed and countersigned in accordance with the terms of the Trust Agreement and issued and sold as contemplated in the Registration Statement and the Prospectus, the Class A Units have been legally and validly issued, the holders of the Class A Units are entitled to the benefits of such Trust Agreement and the Class A Units are fully paid and nonassessable. Insofar as the foregoing opinions relate to the validity, binding effect or enforceability of any agreement or obligation (a) we have assumed that each other party to such agreement or obligation other than the Depositor has satisfied those legal requirements that are applicable to it to the extent necessary to make such agreement or obligation enforceable against it, and (b) such opinions are subject to applicable bankruptcy, insolvency and similar laws affecting creditors' rights generally and to general principles of equity. The foregoing opinions are limited to the federal law of the United States of America, and the law of the State of New York. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and the reference to this firm in the Registration Statement and the related Prospectus under the caption "Validity of Units." By giving such consent, we do not admit that we are "experts" within the meaning of the Act, or the rules and regulations of the Commission issued thereunder with respect to any part of the Registration Statement, including this exhibit. Very truly yours, CLEARY, GOTTLIEB, STEEN & HAMILTON By /s/ Michael A. Mazzuchi ------------------------------- Michael A. Mazzuchi, a Partner -----END PRIVACY-ENHANCED MESSAGE-----