EXHIBIT 10.1

EXECUTION COPY

WARRANT AGENT AGREEMENT

STRATSSM CALLABLE CLASS A CERTIFICATES, SERIES 2007-1

STRATSSM TRUST FOR AMBAC FINANCIAL GROUP, INC. SECURITIES, SERIES 2007-1

WARRANT AGENT AGREEMENT, dated as of July 16, 2007 (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 STRATSSM Trust For Ambac Financial
Group, Inc. Securities, Series 2007-1 (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 STRATSSM Series Supplement 2007-1, dated as of
July 16, 2007 (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 75 call warrants with respect to the
Underlying Securities, each relating to (i) call options with respect to
$500,000 principal amount of the Underlying Securities per Call Warrant and (ii)
the right to receive the Warrantholder Allocation Amounts (as defined in the
Series Supplement) (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

 

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and multiples thereof. The “Called Underlying Securities” shall be Underlying
Securities having a principal amount equal to $500,000 per exercised Call
Warrant. 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 where the called Underlying Securities cannot be
delivered to the relevant Warrantholder due to time constraints or other
restrictions relating to such tender, 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.

(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 (except in connection with a Call Notice relating to a tender
offer for Underlying Securities that will not be delivered to the relevant
Warrantholder), 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

 

 

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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 August 15,
2012) 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.
Notwithstanding the foregoing, if at any time an SEC Reporting Failure occurs
and is continuing, Warrantholders will have the right to exercise the Call
Warrants so long as the Call Warrants are exercised prior to the liquidation or
distribution of the Underlying Securities.

(e) The Call Warrants may also be exchanged, together with Class A Certificates,
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 and the called Underlying Securities cannot be
delivered to the relevant Warrantholder due to time constraints or other
restrictions relating to such tender, 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

 

 

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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
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.”

 

 

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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.

 

 

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“Call Warrant”: As defined in the Recitals hereof.

“Class A Allocation Amount”: With respect to any amounts held by the Trust on
such date, (i) all such amounts representing interest received with respect to
the Underlying Securities, including accrued and unpaid interest, and (ii)
91.4328% of all such amounts representing principal of the Underlying
Securities, not to exceed $25 per Class A Certificate

“Closing Date”: July 16, 2007.

“Called Underlying Securities”: As defined in Section I.1(a) hereof.

“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.

“SEC Reporting Failure”: If (1) the Underlying Issuer (as defined in the Series
Supplement) 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 all required periodic reports for any applicable 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.

“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 8, 2006,
between the Trustor and the Trustee, as supplemented by the STRATSSM Supplement
2007-1, dated as of July 16, 2007, 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 hereof, or any successor thereto under the
Trust Agreement.

“Trustor Order”: As defined in the Trust Agreement.

“Warrant Agent”: U.S. Bank Trust National Association, a national banking
association, in its capacity as warrant agent hereunder, or any successor
thereto hereunder.

“Warrant Exercise Date”: Any Business Day on or after August 15, 2012 and any

 

 

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Business Day during any earlier period during which (i) an Event of Default with
respect to the Underlying Securities has occurred and is continuing, (ii) a
tender offer for the Underlying Securities has occurred, (iii) any redemption or
other unscheduled payment on the Underlying Securities has been announced and
the distribution to securityholders of the redemption price or other unscheduled
payment has not yet occurred or (iv) an SEC Reporting Failure has occurred and
is continuing, in each case as set forth in the notice from the Warrantholder to
the Warrant Agent and the Trustee.

“Warrant Exercise Purchase Price”: An amount paid by the Warrantholder on each
Warrant Exercise Date equal to 100% of the principal amount of the Underlying
Securities being purchased pursuant to the exercise of the Call Warrants, in
each case, plus accrued and unpaid interest to and including the Warrant
Exercise Date.

 

Article V

 

Warrant Agent

Section V.1       Limitation on Liability. The Warrant Agent shall be protected
against, and shall incur no, liability for or in respect of any action taken,
suffered or omitted by it in connection with its administration of the Call
Warrants in reliance upon any instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement or other paper or document in good faith believed by it
to be genuine and to be signed, executed and, where necessary, verified and
acknowledged, by the proper Person or Persons; unless a court of competent
jurisdiction enter in a non appealable judgment that such liability resulted
from the gross negligence or willful misconduct of the Warrant Agent.

Section V.2       Duties of Warrant Agent. The Warrant Agent undertakes only the
specific duties and obligations imposed hereunder upon the following terms and
conditions, by all of which the Trustor, the Trust, the Trustee and each
Warrantholder shall be bound:

(a) The Warrant Agent may consult with legal counsel (who may be legal counsel
for the Trustor), and the opinion of such counsel shall be full and complete
authorization and protection to the Warrant Agent as to any action taken or
omitted by it in good faith and in accordance with such opinion, provided the
Warrant Agent shall have exercised reasonable care in the selection by it of
such counsel.

(b) Whenever in the performance of its duties hereunder, the Warrant Agent shall
deem it necessary or desirable that any fact or matter be proved or established
by the Trustor or the Trustee prior to taking or suffering any action hereunder,
such fact or matter may be deemed to be conclusively proved and established by a
Trustor Order or a certificate signed by a Responsible Officer of the Trustee
and delivered to the Warrant Agent; and such certificate shall be full
authorization to the Warrant Agent for any action taken or suffered in good
faith by it hereunder in reliance upon such certificate.

 

 

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(c) The Warrant Agent shall be liable hereunder only for its own gross
negligence, willful misconduct or bad faith.

(d) The Warrant Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained herein or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Trust and the Trustor only.

(e) The Warrant Agent shall not have any responsibility in respect of and makes
no representation as to the validity of the Call Warrants or the execution and
delivery thereof (except the due execution thereof by the Warrant Agent); nor
shall it be responsible for any breach by the Trust of any covenant or condition
contained in the Call Warrants; nor shall it by any act thereunder be deemed to
make any representation or warranty as to the Underlying Securities to be
purchased thereunder.

(f) The Warrant Agent is hereby authorized and directed to accept instructions
with respect to the performance of its duties hereunder from the Chairman of the
Board, the Chief Executive Officer, Chief Financial Officer, Chief Operating
Officer, President, a Vice President, its Treasurer, an Assistant Treasurer, its
Secretary or an Assistant Secretary of the Trustor, and any Responsible Officer
of the Trustee, and to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable for any action taken or
suffered to be taken by it in good faith in accordance with instructions of any
such officer.

(g) The Warrant Agent and any shareholder, director, officer or employee of the
Warrant Agent may buy, sell or deal in any of the Call Warrants or other
securities of the Trust or otherwise act as fully and freely as though it were
not Warrant Agent hereunder, so long as such persons do so in full compliance
with all applicable laws. Nothing herein shall preclude the Warrant Agent from
acting in any other capacity for the Trust, the Trustor or for any other legal
entity.

(h) The Warrant Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either by itself or by or
through its attorneys or agents.

(i) The Warrant Agent shall act solely as the agent of the Warrantholders
hereunder. The Warrant Agent shall not be liable except for the failure to
perform such duties as are specifically set forth herein, and no implied
covenants or obligations shall be read into the Call Warrants against the
Warrant Agent, whose duties shall be determined solely by the express provisions
thereof. The Warrant Agent shall not be deemed to be a fiduciary.

(j) The Warrant Agent shall not have any duty to calculate or determine any
adjustments with respect either to the Warrant Exercise Purchase Price or to the
kind and amount of property receivable by holders of Call Warrants upon the
exercise thereof.

(k) The Warrant Agent shall not be responsible for any failure on the part of
the Trustee to comply with any of its covenants and obligations contained herein
or in the Call Warrants.

(l) The Warrant Agent shall not be under any obligation or duty to institute,
appear in or defend any action, suit or legal proceeding in respect hereof or
the Call Warrants, unless first indemnified to its satisfaction, but this
provision shall not affect the power of the Warrant Agent

 

 

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to take such action as the Warrant Agent may consider proper, whether with or
without such indemnity. The Warrant Agent shall promptly notify the Trustor and
the Trustee in writing of any claim made or action, suit or proceeding
instituted against it arising out of or in connection with the Call Warrants.

(m) The Trustee will perform, execute, acknowledge and deliver or cause to be
performed, executed, acknowledged and delivered all such further acts,
instruments and assurances as may be required by the Warrant Agent in order to
enable it to carry out or perform its duties hereunder.

Section V.3      Change of Warrant Agent. The Warrant Agent may resign and be
discharged from its duties hereunder upon thirty (30) days’ notice in writing
mailed to the Trustor and the Trustee by registered or certified mail, and to
the holders of the Call Warrants by first-class mail at the expense of the
Trustor; provided that no such resignation or discharge shall become effective
until a successor Warrant Agent shall have been appointed hereunder. The Trustor
may remove the Warrant Agent or any successor Warrant Agent upon thirty (30)
days’ notice in writing, mailed to the Warrant Agent or successor Warrant Agent,
as the case may be, and to the holders of the Call Warrants by first-class mail;
provided further that no such removal shall become effective until a successor
Warrant Agent shall have been appointed hereunder. If the Warrant Agent shall
resign or be removed or shall otherwise become incapable of acting, the Trustor
shall promptly appoint a successor to the Warrant Agent, which may be designated
as an interim Warrant Agent. If an interim Warrant Agent is designated, the
Trustor shall then appoint a permanent successor to the Warrant Agent, which may
be the interim Warrant Agent. If the Trustor shall fail to make such appointment
of a permanent successor within a period of thirty (30) days after such removal
or within sixty (60) days after notification in writing of such resignation or
incapacity by the resigning or incapacitated Warrant Agent or by the holder of a
Call Warrant, then the Warrant Agent or registered holder of any Warrant may
apply to any court of competent jurisdiction for the appointment of such a
successor. Any successor to the Warrant Agent (or any parent of such successor)
appointed hereunder must have long-term unsecured debt obligations that are
rated in one of the four highest rating categories by the Rating Agency. Any
entity which may be merged or consolidated with or which shall otherwise succeed
to substantially all of the trust or agency business of the Warrant Agent shall
be deemed to be the successor Warrant Agent without any further action. The
holders of more than 50% of the outstanding Call Warrants, by an instrument
delivered to the Trustor and the Warrant Agent in writing, shall have the right
to object to, and by objecting shall thereby prevent the occurrence of, any
proposed action by the Trustor under this Section V.3.

Section V.4       Indemnification of Warrant Agent. The Trustor shall indemnify
and hold harmless the Warrant Agent 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 performance of its duties
under this Agreement. The Warrant Agent shall notify the Trustor promptly of any
claim for which it may seek indemnity. Failure by the Warrant Agent 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 Warrant Agent through the Warrant Agent’s own willful
misconduct, negligence or bad faith. The indemnities contained in this
Section V.4 shall survive the resignation or termination of the Warrant Agent or
the termination of this Agreement.

 

 

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Failure by the Trustor to pay, reimburse or indemnify the Warrant Agent shall
not entitle the Warrant Agent to any payment, reimbursement or indemnification
from the Trust, nor shall such failure release the Warrant Agent from the duties
it is required to perform under this Agreement. Any unpaid, unreimbursed or
unindemnified amounts shall not be borne by the Trust and shall not constitute a
claim against the Trust, but shall be borne by the Warrant Agent in its
individual capacity, and the Warrant Agent shall have no recourse against the
Trust with respect thereto.

Section V.5       Appointment of Warrant Agent. The Trust has duly appointed
U.S. Bank Trust National Association as Warrant Agent for purposes of the
Warrant Agent Agreement and to perform such other obligations and duties as are
herein set forth. The Warrant Agent hereby accepts such appointment and agrees
that it shall follow the procedures set forth in this Warrant Agent Agreement.

Article VI

 

Miscellaneous

Section VI.1     Remedies. The remedies at law of the Warrantholder in the event
of any default or threatened default by the Warrant Agent in the performance of
or compliance with any of the terms of the Call Warrants are not and will not be
adequate and, to the fullest extent permitted by law, such terms may be
specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
thereof or otherwise.

Section VI.2    Limitation on Liabilities of Holder. Nothing contained in the
Call Warrants or this Agreement shall be construed as imposing any obligation on
the holder thereof to purchase any of the Underlying Securities except in
accordance with the terms thereof.

Section VI.3      Notices. All notices and other communications under this
Agreement shall be in writing and shall be delivered, or mailed by registered or
certified mail, return receipt requested, by a nationally recognized overnight
courier, postage prepaid, addressed (a) if to any holder of any Call Warrant, at
the registered address of such holder as set forth in the register kept by the
Warrant Agent, or (b) if to the Warrant Agent, to 100 Wall Street, Suite 1600,
New York, New York 10005, Attention: Corporate Trust or to such other address
notice of which the Warrant Agent shall have given to the holder thereof and the
Trustee or (c) if to the Trust or the Trustee, to the Corporate Trust Office (as
set forth in the Trust Agreement); provided that the exercise of any Call
Warrant shall be effective in the manner provided in Article I.

Any notice to be given by the Trustor, the Warrant Agent or the Trustee to the
Warrantholders shall be sufficiently sent if sent by facsimile and first-class
mail to the addresses set forth in the Warrant Register. Notwithstanding any
provisions of the Trust Agreement to the contrary, the Trustee shall deliver all
notices or reports required to be delivered by it to the Warrantholders without
charge to such Warrantholders. In the event that the Trustee receives a request
from the Underlying Securities Trustee, the Underlying 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,

 

 

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the Trustee shall within two (2) Business Days of the date of such request mail
a notice of such proposed amendment, modification, waiver or solicitation to the
Warrantholders.

Section VI.4      Amendment. (a) This Agreement may be amended from time to time
by the Trustor, the Trustee and the Warrant Agent without the consent of the
Warrantholder, upon receipt of an opinion of counsel satisfactory to the Warrant
Agent that the provisions hereof have been satisfied and that such amendment
would not alter the status of the Trust as a grantor trust under the Code, for
any of the following purposes: (i) to cure any ambiguity or to correct or
supplement any provision herein which may be defective or inconsistent with any
other provision herein or to provide for any other terms or modify any other
provisions with respect to matters or questions arising under the Call Warrants
which shall not adversely affect in any material respect the interests of the
holder thereof or any holder of a Certificate or (ii) to evidence and provide
for the acceptance of appointment hereunder of a Warrant Agent other than U.S.
Bank Trust National Association.

(b) Without limiting the generality of the foregoing, this Agreement may also be
modified or amended from time to time by the Trustor, the Trustee and the
Warrant Agent with the consent of the holders of 66-2/3% of the outstanding Call
Warrants, upon receipt of an opinion of counsel satisfactory to the Warrant
Agent that the provisions hereof (including, without limitation, the following
proviso) have been satisfied, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of the Call Warrants
or of modifying in any manner the rights of the holders of the Call Warrants;
provided, however, that no such amendment shall (i) adversely affect in any
material respect the interests of holders of Certificates without the consent of
the holders of Certificates evidencing not less than the Required
Percentage-Amendment of the aggregate Voting Rights of such affected
Certificates (as such terms are defined in the Trust Agreement) and without
written confirmation from the Rating Agency that such amendment will not result
in a downgrading or withdrawal of its rating of the Certificates; (ii) alter the
dates on which Call Warrants are exercisable or the amounts payable upon
exercise of a Call Warrant without the consent of the holders of Certificates
evidencing 100% of the aggregate Voting Rights of such affected Certificates and
the holders of 100% of the affected Call Warrants or (iii) reduce the percentage
of aggregate Voting Rights required by (i) or (ii) without the consent of the
holders of all such affected Certificates. Notwithstanding any other provision
of this Agreement, this Section VI.4(b) shall not be amended without the consent
of the holders of 100% of the affected Call Warrants.

(c) The Warrant Agent shall notify the Rating Agency of any such proposed
amendment or modification prior to the execution thereof and promptly after the
execution of any such amendment or modification, the Warrant Agent shall furnish
a copy of such amendment or modification to each holder of a Call Warrant, to
each holder of a Certificate and to the Rating Agency. It shall not be necessary
for the consent of holders of Call Warrants or Certificates under this Section
to approve the particular form of any proposed amendment, but it shall be
sufficient if such consent shall approve the substance thereof. The manner of
obtaining such consents and of evidencing the authorization of the execution
thereof shall be subject to such reasonable regulations as the Warrant Agent may
prescribe.

Section VI.5     Expiration. The right to exercise the Call Warrants shall
expire on the earliest to occur of (a) the cancellation thereof, (b) the
termination of the Trust Agreement or (c)

 

 

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the liquidation, disposition or payment in full (whether by maturity, redemption
or otherwise) of all of the Underlying Securities.

Section VI.6      Descriptive Headings. The headings in this Agreement are for
purposes of reference only and shall not limit or otherwise affect the meaning
hereof.

Section VI.7     GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW
OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.

Section VI.8    Judicial Proceedings; Waiver of Jury. Any judicial proceeding
brought against the Trust, the Trustee or the Warrant Agent with respect to the
Call Warrants or this Agreement may be brought in any court of competent
jurisdiction in the County of New York, State of New York or of the United
States of America for the Southern District of New York and, by execution and
delivery of the Call Warrants, the Trustee on behalf of the Trust and the
Warrant Agent (a) accepts, generally and unconditionally, the nonexclusive
jurisdiction of such courts and any related appellate court, and irrevocably
agrees that the Trust, the Trustee and the Warrant Agent shall be bound by any
judgment rendered thereby in connection with the Call Warrants, subject to any
rights of appeal, and (b) irrevocably waives any objection that the Trust, the
Trustee or the Warrant Agent may now or hereafter have as to the venue of any
such suit, action or proceeding brought in such a court or that such court is an
inconvenient forum.

Section VI.9      Nonpetition Covenant; No Recourse. Each of (i) the
Warrantholder, by its acceptance thereof, and (ii) the Warrant Agent, agrees
that it shall not (and, in the case of the holder, that it shall not direct the
Warrant Agent to), until the date which is one year and one day after the
payment in full of the Certificates and all other securities issued by the
Trust, the Trustor or entities formed, established or settled by the Trustor,
acquiesce, petition or otherwise invoke or cause the Trust, the Trustor or any
such other entity to invoke the process of the United States of America, any
State or other political subdivision thereof or any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government for the purpose of commencing or sustaining a case by or against
the Trust, the Trustor or any such other entity under a federal or state
bankruptcy, insolvency or similar law or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of the
Trust, the Trustor or any such other entity or all or any part of the property
or assets of Trust, the Trustor or any such other entity or ordering the winding
up or liquidation of the affairs of the Trust, the Trustor or any such other
entity. Notwithstanding anything to the contrary herein, the provisions of this
Section VI.9 shall survive the termination of this Agreement.

Section VI.10   Amendments to the Trust Agreement. The Trustee hereby agrees not
to consent to any amendments to the Trust Agreement which will adversely affect
the rights of the Warrantholders in a material manner without the consent of the
Warrantholders.

Section VI.11  Express Beneficiaries. The Warrantholders shall be express third
party beneficiaries to this Agreement entitled to the benefits hereof and to
enforce the provisions hereof.

 

 

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Section VI.12  Breach of Representation and Warranty. Upon the discovery by the
Trustor or the Trustee of a breach of any of the representations and warranties
made in the Trust Agreement that materially and adversely affects the interests
of the Warrantholders, the party discovering such breach shall forward or cause
the Warrant Agent to forward a written notice of such breach to the
Warrantholders.

Section VI.13   Administration of Trust. In addition to the provisions set forth
in Section 3.1 of the Base Trust Agreement, the Trustee shall administer the
Trust for the benefit of the Warrantholders but only to the extent of the
interests of the Warrantholders therein and provided further, in the event of a
conflict of interest between the Certificateholders and the Warrantholders, the
interests of the Certificateholders shall prevail. The Warrantholders’ right to
call the Underlying Securities shall not be considered a conflict of interest
with the Certificateholders for purposes of this provision.

Section VI.14  Reports to Warrantholders. The Trustee shall furnish to the
Warrantholders a copy of the report prepared for the Certificateholders pursuant
to Section 4.2 of the Base Trust Agreement, within a reasonable period of time
after such report is furnished to the Certificateholders.

Section VI.15   Access to Certain Documentation. Access to documentation
regarding the Underlying Securities will be afforded without charge to any
Warrantholders so requesting.

Section VI.16   Reporting Obligations. During any period in which the Trust is
not subject to Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended, the Trustee, on behalf of the Trust, shall promptly furnish to holders
of Call Warrants and prospective purchasers of Call Warrants designated by such
holders, upon request of such holders or prospective purchasers, the information
required to be delivered pursuant to Rule 144A(d)(4) of the Securities Act of
1933, as amended, to permit compliance with Rule 144A in connection with the
resale of Call Warrants; provided, however, that the Trust shall not (a) be
required to provide audited financial statements of the Trust or (b) be required
to furnish Rule 144A Information in connection with any request made on or after
the date that is two years from the later of (i) the date such Call Warrant (or
any predecessor Call Warrant) was acquired from the Trust or (ii) the date such
Call Warrant (or any predecessor Call Warrant) was last acquired from an
“affiliate” of the Trust within the meaning of Rule 144. The Trustor shall
advise and reasonably cooperate with the Trustee as to what information, if any,
is required by Rule 144A(d)(4) of the Securities Act of 1933, as amended, and
the Trustee shall be entitled to rely on such advice of the Trustor.

Section VI.17  Voting. Notwithstanding anything to the contrary in the Base
Trust Agreement or the 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 or such Underlying Security, except
in each case with the unanimous consent of the Warrantholders, and subject to
the requirement that such vote would not materially increase the likelihood that
the Trust will fail to qualify as a grantor trust for federal income tax
purpose, and, in any event, that the Trust will not fail to qualify as either a
grantor trust or partnership (other than a publicly traded partnership treated
as a

 

 

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corporation) under the Code, such determination to be based solely on an Opinion
of Counsel; provided, however, that the foregoing shall not apply to any tender
of Underlying Securities pursuant to a tender offer at the direction of a
Warrantholder in accordance with the terms of the Warrants.

 

 

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IN WITNESS WHEREOF, the parties hereto have caused their names to be signed
hereto by their respective duly authorized officers as of the date first above
written.

 

SYNTHETIC FIXED-INCOME SECURITIES, INC.,
as Trustor

By:  /s/ James Whang                                          

Name: James Whang

Title: Authorized Signatory

 

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

 

By:  /s/ Janet O'Hara                                          

Name:   Janet O'Hara

Title: Authorized Signatory

 

U.S. BANK TRUST NATIONAL ASSOCIATION,
as Warrant Agent

 

By:  /s/ Janet O'Hara                                          

Name:    Janet O'Hara

Title: Authorized Signatory

 

 

 

 

 

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