Exhibit 10.1
WARRANT AGENT AGREEMENT
STRATSSM CERTIFICATES, SERIES 2006-4
STRATS(SM) TRUST FOR NEWS CORPORATION SECURITIES, SERIES 2006-4
WARRANT AGENT AGREEMENT, dated as of September 8, 2006 (the
"Warrant Agent
Agreement"), by and between SYNTHETIC FIXED-INCOME SECURITIES,
INC., a Delaware
corporation, as Trustor (the "Trustor"), U.S. BANK TRUST NATIONAL
ASSOCIATION,
as Trustee (the "Trustee") and U.S. BANK TRUST NATIONAL
ASSOCIATION, as Warrant
Agent (the "Warrant Agent").
W I T N E S S E T H:
WHEREAS, concurrently with the execution of this Warrant Agent
Agreement, the
Trustor and the Trustee are creating the STRATS(SM) Trust For News
Corporation
Securities, Series 2006-4 (the "Trust"), a trust being created
under the laws of
the State of New York pursuant to a Base Trust Agreement, dated as
of September
8, 2006 (the "Base Trust Agreement"), between the Trustor and the
Trustee, as
supplemented by the STRATS(SM) Series Supplement 2006-4, dated as
of September
8, 2006 (the "Series Supplement" and, together with the Base Trust
Agreement,
the "Trust Agreement"), between the Trustor and the Trustee;
and
WHEREAS, all representations, covenants and agreements made herein
by the
Trustor, the Warrant Agent and the Trustee are for the benefit and
security of
the Warrantholders.
WHEREAS, in connection with the creation of the Trust and the
deposit therein of
the Underlying Securities, and in consideration therefor, it is
desired to
provide for the issuance of trust certificates (the "Certificates")
evidencing
undivided interests in the Trust and 66 call warrants with respect
to the
Underlying Securities, each relating to $500,000 principal amount
of Underlying
Securities (the "Call Warrants").
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual
covenants expressed herein, it is hereby agreed by and among the
Trustor, the
Trustee and the Warrant Agent as follows:
Article I
Exercise of Warrants
Section I.1 Manner of Exercise. (a) Each of the Call Warrants may
be exercised
by the holder thereof (each, a "Warrantholder"), on any Warrant
Exercise Date.
Each Call Warrant may be exercised in whole or in part; provided,
that, for each
Warrant Exercise Date the exercising Warrantholder (or, if
applicable, two or
more affiliated Warrantholders) must purchase Called Underlying
Securities in a
minimum aggregate principal amount of $500,000. The following
conditions shall
apply to any exercise of the Call Warrants:
(i) A written notice in the form of Exhibit I attached to the
Call
Warrants
(the "Call Notice") specifying the number of Call Warrants
being
exercised
and the Warrant Exercise Date shall be delivered to the Warrant
Agent and
the Trustee at least 10 but not greater than 60 days before
such
Warrant
Exercise Date.
(ii) The Warrantholder shall surrender the Call Warrants to the
Warrant
Agent at its office specified in Section VI.3 hereof no later
than
11:00 a.m.
(New York City time) on such Warrant Exercise Date.
(iii) Except in connection with a Call Notice relating to a
tender
offer for
Underlying Securities, which shall be settled as set forth in
Section
10(j) of the Series Supplement, the Warrantholder shall have
made
payment to
the Warrant Agent, by wire transfer or other immediately
available
funds acceptable to the Warrant Agent, in the amount of the
Warrant
Exercise Purchase Price for the exercised Call Warrants, no
later
than 11:00
a.m. (New York City time) on the Warrant Exercise Date and
shall have
delivered in connection with its payment, an executed
subscription for the Underlying Securities in the form of Exhibit
II
attached
to the Call Warrants.
(iv) The Warrantholder shall have satisfied all conditions to
the
exercise
of Call Warrants set forth in Section 8 of the Series
Supplement.
Upon
exercise of the Call Warrants, the Warrantholder shall be entitled
to
delivery of the Called Underlying Securities. The "Called
Underlying Securities"
shall be Underlying Securities having a principal amount equal to
$500,000 per
exercised Call Warrant.
(b) The
Warrant Agent shall notify the Trustee immediately upon receipt
by
the Warrant Agent of a notice by the holder of the Call Warrants
and upon
receipt of payment of the applicable Warrant Exercise Purchase
Price from such
holder pursuant to clause (a) of this Section I.1. The Warrant
Agent shall
transfer each payment made by the holder thereof pursuant to clause
(a) of this
Section I.1 to the Trustee in immediately available funds, for
application
pursuant to the Trust Agreement no later than 1:00 p.m. (New York
City time) on
the applicable Warrant Exercise Date (and, pending such transfer,
shall hold
each such payment for the benefit of the holder thereof in a
segregated trust
account).
(c) A
notice by the holder of a Call Warrant does not impose any
obligations on a holder of a Call Warrant in any way to pay any
Warrant Exercise
Purchase Price. If, by 11:00 a.m. (New York City time) on the
Warrant Exercise
Date, the holder of the Call Warrant being exercised has not paid
the Warrant
Exercise Purchase Price, then such notice shall automatically
expire and none of
the holders of such Call Warrant, the Warrant Agent and the Trustee
shall have
any obligations with respect to such notice by the holder of such
Call Warrant.
The expiration of a notice by the holder of this Call Warrant shall
in no way
affect a holder of a Call Warrant's right to subsequently deliver a
notice which
satisfies the terms of the Trust Agreement. The Warrant Exercise
Purchase Price
for a call in connection with a tender offer shall be deducted from
the proceeds
of a tender offer by the Trust pursuant to Section 10(j) of the
Series
Supplement.
(d) The
Call Warrants will become immediately exercisable upon an SEC
Reporting Failure (whether such SEC Reporting Failure occurs before
or after
June 1, 2011) and, if the Call Warrants are in the money, as
defined in the
Trust Agreement, they will be deemed to be exercised without
further action by
the Warrantholders and will be cash settled concurrently with the
distribution
to Certificateholders, as provided in Section 10(g) of the Trust
Agreement.
(e) The
Call Warrants may also be exchanged, together with the
Certificates of each Class, for Underlying Securities, upon
compliance with the
provisions of Section 8(f) of the Series Supplement, and any such
exchange shall
be deemed an exercise of the related Call Warrants for purposes of
the transfer
of the exchanged principal amount of Underlying Securities pursuant
to Section
I.2.
Section
I.2 Transfer of Underlying Securities. As soon as practicable
after each surrender of the Call Warrants, and no later than 11:00
a.m. (New
York City time) on the Warrant Exercise Date and upon satisfaction
of all other
requirements described in the Call Warrants, the Warrant Agent
shall instruct
the Trustee to cause the Called Underlying Securities represented
by the number
of Warrants being exercised hereunder to be registered on the
book-entry system
of the related depositary in the registered name or names furnished
by the
holder, and, in case such exercise is of less than all of the Call
Warrants, new
Call Warrants of like tenor, representing the remaining unexercised
and
outstanding Call Warrants of the holder, shall be delivered by the
Warrant Agent
to the holder thereof; provided, however, that if such Call Notice
is in
connection with a tender offer, the Warrant Agent shall instruct
the Trustee to
distribute to the exercising Warrant Holder the excess of the
tender offer
proceeds over the Call Price pursuant to Section 10(j) of the
Series Supplement.
The Trustee shall cause the delivery of the Called Underlying
Securities to the
holder or its nominee no later than 1:00 p.m. (New York City time)
on the
applicable Warrant Exercise Date in accordance with Section 8(e) of
the Series
Supplement.
Section
I.3 Cancellation and Destruction of Call Warrant. All Call
Warrants surrendered to the Warrant Agent for the purpose of
exercise pursuant
to Section I.1 and actually exercised, or for the purpose of
transfer or
exchange pursuant to Article III, shall be cancelled by the Warrant
Agent, and
no Call Warrant (other than that reflecting such transfer or
exchange) shall be
issued in lieu thereof. The Warrant Agent shall destroy all
cancelled Call
Warrants.
Section
I.4 No Rights as Holder of Underlying Securities Conferred by
Warrants. Prior to the exercise thereof, the Call Warrants shall
not entitle the
holder thereof to any of the rights of a holder of the Underlying
Securities,
including, without limitation, the right to receive the payment of
any amount on
or in respect of the Underlying Securities or to enforce any of the
covenants of
the Trust Agreement.
Section
I.5 Pro Rata Reduction of Call Warrants if Partial Redemption
of
Underlying Securities. If Underlying Securities are redeemed in
part by the
Underlying Issuer and the Warrant Holders do not exercise their
call rights in
connection with such partial redemption, then the number of Call
Warrants held
by each Warrant Holder shall be reduced proportionately so that the
aggregate
amount of Underlying Securities callable by Call Warrants shall
equal the amount
of Underlying Securities held by the Trust after giving effect to
such partial
redemption.
Section
I.6 Selection of Called Underlying Securities in the event of a
Call in Connection with a Partial Redemption. If a Warrant Holder
exercises Call
Warrants in connection with a partial redemption of the Underlying
Securities,
the Trustee shall, to the extent possible, select Called Underlying
Securities
for transfer to the Warrant Holder that have been selected by the
Underlying
Securities Issuer for redemption. If more than one Warrant Holder
exercises Call
Warrants in such circumstances, such Called Underlying Securities
that have been
selected for redemption shall be allocated among such Warrant
Holders in
proportion to the number of Call Warrants exercised by each.
Article II
Restrictions on Transfer
Section
II.1 Restrictive Legends. The Call Warrants may not be
transferred
except to a transferee whom the transferor of the Call Warrants
reasonably
believes is (A) a "Qualified Institutional Buyer" (as defined in
Rule 144A under
the Securities Act) and (B) acquiring the Call Warrants for its own
account or
for the account of an investor of the type described in clause (A)
above as to
which the transferee exercises sole investment discretion. In
addition, each
transferee shall be required to deliver to the Warrant Agent an
investment
letter in the form of Exhibit III attached to the Call
Warrants.
Except as
otherwise permitted by this Article II, the Call Warrants (or
the Call Warrants issued upon the transfer of the Call Warrants)
shall be issued
with a legend in substantially the following form:
"These
Call Warrants have not been registered under the Securities Act
of
1933, as amended and may not be transferred, sold or otherwise
disposed of
except while a registration under such Act is in effect or pursuant
to the
exemption therefrom under such Act provided pursuant to Rule 144A
thereunder.
The Call Warrants represented hereby may be transferred only in
compliance with
the conditions specified in these Call Warrants including the
delivery of an
Investment Letter in the form attached hereto. Each prospective
transferee of
these Call Warrants shall be required to represent that it is (A) a
"Qualified
Institutional Buyer" (as defined in Rule 144A) and (B) acquiring
the Call
Warrants for its own account or for the account of an investor of
the type
described in clause (A) above as to which the transferee exercises
sole
investment discretion."
Section
II.2 Notice of Proposed Transfer. Prior to any transfer of any
Call Warrant, the holder thereof will give five (5) Business Days
(or such
lesser period acceptable to the Warrant Agent) prior written notice
to the
Warrant Agent of such holder's intention to effect such transfer
and to comply
in all other respects with this Section II.2. Each transfer of Call
Warrants
must be for a whole number of Call Warrants.
Article III
Registration and Transfer of Call Warrants, etc.
Section
III.1 Warrant Register; Ownership of Call Warrants. The Warrant
Agent will keep a register in which the Warrant Agent will provide
for the
registration of Call Warrants and the registration of transfers of
Call Warrants
representing whole numbers of Warrants. The Trustee and the Warrant
Agent may
treat the Person in whose name any Call Warrant is registered on
such register
as the owner thereof for all purposes, and the Trustee and the
Warrant Agent
shall not be affected by any notice to the contrary.
Section
III.2 Transfer and Exchange of Call Warrants. Upon surrender of
any Call Warrant for registration of transfer or for exchange to
the Warrant
Agent, the Warrant Agent shall (subject to compliance with Article
II) execute
and deliver, and cause the Trustee, on behalf of the Trust, to
execute and
deliver, in exchange therefor, a new Call Warrant of like tenor and
evidencing a
like number of Call Warrants, in the name of such holder or as such
holder (upon
payment by such holder of any applicable transfer taxes or
government charges)
may direct. The Call Warrants must be transferred in a minimum
amount of
$500,000.
Section
III.3 Replacement of Call Warrants. Upon receipt of evidence
reasonably satisfactory to the Warrant Agent of the loss, theft,
destruction or
mutilation of any Call Warrant and, in the case of any such loss,
theft or
destruction of any Call Warrant, upon delivery of an indemnity bond
in such
reasonable amount as the Warrant Agent may determine, or, in the
case of any
such mutilation, upon the surrender of such Call Warrant for
cancellation to the
Warrant Agent, the Warrant Agent shall execute and deliver, and
cause the
Trustee, on behalf of the Trust, to execute and deliver, in lieu
thereof, a new
Call Warrant of like tenor bearing a number not contemporaneously
outstanding.
Section
III.4 Execution and Delivery of Call Warrants. The Warrant
Agent
hereby agrees (subject to compliance with Article II) to execute
and deliver any
new Call Warrants issued in accordance with Section I.2 or this
Article III and
the Trustee, on behalf of the Trust, shall further execute by
acknowledgement
thereon any such Call Warrants as the Warrant Agent shall request
in accordance
herewith.
Article IV
Definitions
As used
herein, unless the context otherwise requires, the following
terms
have the following respective meanings:
"Business
Day": As defined in the Trust Agreement.
"Call
Warrant": As defined in the Recitals hereof.
"Change of
Control Triggering Event": As defined in the Prospectus
Supplement, dated as of September 6, 2006, relating to the public
offering of
the Class A-1 Certificates.
"Closing
Date": September 8, 2006.
"Called
Underlying Securities": As defined in Section I.1(a) hereof.
"Make
Whole Amount": As defined in the Trust Agreement.
"Person":
Any individual, corporation, partnership, joint venture,
association, joint stock company, trust (including any beneficiary
thereof),
unincorporated organization or government or any agency or
political subdivision
thereof.
"Rating
Agency": Standard & Poor's Ratings Services and any
successor
thereto.
"Responsible Officer": As defined in the Trust Agreement.
"Securities Act": The Securities Act of 1933, or any similar
federal
statute, and the rules and regulations of the Commission
thereunder, all as the
same shall be in effect at the time.
"Trust":
As defined in the Recitals hereof.
"Trust
Agreement": The Base Trust Agreement, dated as of September 26,
2003, between the Trustor and the Trustee, as supplemented by the
STRATS(SM)
Supplement 2006-4, dated as of September 8, 2006, between the
Trustor and the
Trustee, incorporating by reference the definitions and assumptions
thereto, as
the same may be amended or modified from time to time.
"Trustee":
As defined in the Recitals hereof, or any successor thereto
under the Trust Agreement.
"Trustor":
As defined in the Recitals h
