Document:

exv10w67

 

EXHIBIT 10.67

EMPLOYMENT AGREEMENT

          EMPLOYMENT
AGREEMENT (this “Agreement”), dated as of
February 10, 2006 and effective as of March 16, 2006, by and between Par
Pharmaceutical Companies, Inc., a Delaware corporation (“Par” or “Employer”), and Gerard Martino
(“Executive”).

RECITALS:

          A. WHEREAS, Employer wishes to employ Executive in the capacity of Executive Vice President
and Chief Financial Officer of Par, and Executive desires to provide services to Par in this
capacity; and

          B. WHEREAS, Employer and Executive desire to formalize the terms and conditions of Executive’s
employment with Par.

          In consideration of the mutual promises herein contained, the parties hereto hereby agree as
follows:

          1. Employment.

               1.1. General. Par hereby employs Executive effective March 16, 2006 (the “Effective
Date”), in the capacity of Executive Vice President and Chief Financial Officer of Par at the
compensation rate and benefits set forth in Section 2 hereof for the Employment Term (as defined in
Section 3.1 hereof). Executive hereby accepts such employment, subject to the terms and conditions
herein contained. In all such capacity, Executive shall perform and carry out such duties and
responsibilities as may be assigned to him from time to time by the Board and by the Chief
Executive Officer of Par reasonably consistent with Executive’s position and this Agreement, and
shall report to Scott Tarriff, President and Chief Executive Officer of Par.

               1.2. Time Devoted to Position. Executive, during the Employment Term, shall devote
substantially all of his business time, attention and skills to the business and affairs of
Employer.

               1.3. Certifications. Whenever the Chief Executive Officer of Par is required by law,
rule or regulation or requested by any governmental authority or by Par’s auditors to provide
certifications with respect to Par’s financial statements or filings with the Securities and
Exchange Commission or any other governmental authority, Executive shall sign such certifications
as may be reasonably requested by the Chief Executive Officer of Par and/or Employer, with such
exceptions as Executive deems necessary to make such certifications accurate and not misleading.

          2. Compensation and Benefits.

               2.1. Salary. At all times Executive is employed hereunder, Employer shall pay to
Executive, and Executive shall accept, as full compensation for any and all services rendered and
to be rendered by him during such period to Employer in all capacities, including,

 

 

but not limited to, all services that may be rendered by him to any of Employer’s existing
subsidiaries, entities and organizations hereafter formed, organized or acquired by Employer,
directly or indirectly (each, a “Subsidiary” and collectively, the “Subsidiaries”), the following:
(i) a base salary at the annual rate of $337,000 (Three Hundred and Thirty-Seven Thousand Dollars),
or at such increased rate as the Board (through its Compensation and Stock Option Committee), in
its sole discretion, may hereafter from time to time grant to Executive, subject to adjustment in
accordance with Section 2.2 hereof (as so adjusted, the “Base Salary”); and (ii) any additional
bonus and the benefits set forth in Sections 2.3, 2.4 and 2.5 hereof. The Base Salary shall be
payable in accordance with the regular payroll practices of Employer applicable to senior
executives, less such deductions as shall be required to be withheld by applicable law and
regulations or otherwise.

               2.2. Adjustments in Base Salary. On each October 1 during the Employment Term, the
Base Salary shall be increased by that percentage, if any, by which the Consumer Price Index, Urban
Wage Earners and Clerical Workers, for the New York City metropolitan area, published by the United
States Government as of the month of September of such year exceeds such Index for the immediately
preceding September.

               2.3. Bonus. Subject to Section 3.3 hereof, Executive shall be entitled to an annual
bonus during the Employment Term in such amount (if any) as determined by the Board based on such
performance criteria as it deems appropriate, including, without limitation, Executive’s
performance and Employer’s earnings, financial condition, rate of return on equity and compliance
with regulatory requirements. The target amount of Executive’s annual bonus shall be equal to 50%
(fifty percent) of his Base Salary. Executive shall receive a guaranteed minimum bonus for 2006 in
an amount equal to this bonus target.

               2.4. Equity Awards. Executive shall be entitled to participate in long-term incentive
plans commensurate with his title and position, including, without limitation, stock option,
restricted stock, and similar equity plans of Employer as may be offered from time to time. In
connection herewith, Executive has been granted 15,000 shares of restricted common stock of Par and
options to purchase 50,000 shares of common stock on terms and conditions set forth in the 2004
Performance Equity Plan and Executive’s Stock Option Agreement (the “Sign-On Equity Award”). All
long-term incentive awards and grants pursuant to this paragraph shall vest incrementally over a
four-year period on each anniversary of the date of such grant and shall otherwise be subject to
the terms and conditions set forth in the 2005 or subsequently restated Equity Plan and the reward
agreement(s) relating to such shares.

               2.5. Executive Benefits.

                    2.5.1. Expenses. Employer shall promptly reimburse Executive for expenses he
reasonably incurs in connection with the performance of his duties (including business travel and
entertainment expenses) hereunder, all in accordance with Employer’s policies with respect thereto
as in effect from time to time.

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                    2.5.2. Employer Plans. Executive shall be entitled to participate in such employee benefit
and welfare plans and programs as Employer may from time to time generally offer or provide to
executive officers of Employer or its Subsidiaries, including, but not limited to, participation in
life insurance, health and accident, medical plans and programs and profit sharing and retirement
plans.

                    2.5.3. Vacation. Executive shall be entitled to four (4) weeks of paid vacation per
calendar year, prorated for any partial year.

                    2.5.4. Automobile. Employer shall provide Executive with an automobile cash allowance
in the amount of $1,050 (gross) per month.

                    2.5.5. Life Insurance. Employer shall obtain (provided, that Executives qualifies on
a non-rated basis) a term life insurance policy, the premiums of which shall be borne by Employer
and the death benefits of which shall be payable to Executive’s estate, or as otherwise directed by
Executive, in the amount of $1 million throughout the Employment Term.

               2.6. Signing Bonus. On the date hereof, Employer shall pay to Executive a one-time
signing bonus (the “Signing Bonus”) in the amount of $115,000 (One Hundred and Fifteen Thousand
Dollars), less such deductions as shall be required to be withheld by applicable law and
regulations. In the event Executive’s employment is terminated during the Initial Term by
Executive pursuant to Section 3.2.2 hereof or by Employer pursuant to Section 3.2.4 hereof,
Executive shall repay to Employer the Signing Bonus, less one-twelfth (1/12) of such amount for
each full thirty (30) day period during which Executive shall have been employed hereunder.

          3. Employment Term; Termination.

               3.1. Employment Term. Executive’s employment hereunder shall commence on the
Effective Date (as defined in Section 1.1 hereof) and, except as otherwise provided in Section 3.2
hereof, shall continue until the third (3rd) anniversary of the Effective Date (the “Initial
Term”). Thereafter, this Agreement shall automatically be renewed for successive one-year periods
commencing on the third (3rd) anniversary of the Effective Date (the Initial Term, together with
any such subsequent employment period(s), being referred to herein as the “Employment Term”),
unless Executive or Employer shall have provided a written notice of termination in respect of its
or his election not to renew the Employment Term to the other party at least 90 days prior to such
termination. Upon nonrenewal of the Employment Term pursuant to this Section 3.1 or termination
pursuant to Sections 3.2.1 through 3.2.6 hereof, inclusive, Executive shall be released from any
duties hereunder (except as set forth in Section 4 hereof) and the obligations of Employer to
Executive shall be as set forth in Section 3.3 hereof only.

               3.2. Events of Termination. The Employment Term shall terminate upon the occurrence
of any one or more of the following events:

                    3.2.1. Death. In the, event of Executive’s death, the Employment Term shall terminate
on the date of his death.

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                    3.2.2. Without Cause By Executive. Executive may terminate the Employment Term at any
time during such Term for any reason whatsoever by giving a Notice of Termination to Employer. The
Date of Termination pursuant to this Section 3.2.2 shall be thirty (30) days after the Notice of
Termination is given.

                    3.2.3. Disability. In the event of Executive’s Disability (as hereinafter defined),
Employer may, at its option, terminate the Employment Term by giving a Notice of Termination to
Executive. The Notice of Termination shall specify the Date of Termination, which date shall not be
earlier than thirty (30) days after the Notice of Termination is given. For purposes of this
Agreement, “Disability” means disability as defined in any long-term disability insurance policy
provided by Employer and insuring Executive, or, in the absence of any such policy, the inability
of Executive for 180 days in any twelve (12) month period to substantially perform his duties
hereunder as a result of a physical or mental illness, all as determined in good faith by the
Board.

                    3.2.4. Cause. Employer may, at its option, terminate the Employment Term for “Cause”
based on objective factors determined in good faith by a majority of the Board as set forth in a
Notice of Termination to Executive specifying the reasons for termination and the failure of the
Executive to cure the same within ten (10) days after Employer shall have given the Notice of
Termination; provided, however, that in the event the Board in good faith
determines that the underlying reasons giving rise to such determination cannot be cured, then the
ten (10) day period shall not apply and the Employment Term shall terminate on the date the Notice
of Termination is given. For purposes of this Agreement, “Cause” shall mean (i) Executive’s
conviction of, guilty or no contest plea to, or confession of guilt of, a felony, or other crime
involving moral turpitude; (ii) an act or omission by Executive in connection with his employment
that constitutes fraud, criminal misconduct, breach of fiduciary duty, dishonesty, gross
negligence, malfeasance, willful misconduct or other conduct that is materially harmful or
detrimental to Employer; (iii) a material breach by Executive of this Agreement; (iv) continuing
failure to perform such duties as are assigned to Executive by Employer in accordance with this
Agreement, other than a failure resulting from a Disability; (v) Executive’s knowingly taking any
action on behalf of Employer or any of its affiliates without appropriate authority to take such
action; (vi) Executive’s knowingly taking any action in conflict of interest with Employer or any
of its affiliates given Executive’s position with Employer; and/or (vii) the commission of an act
of personal dishonesty by Executive that involves personal profit in connection with Employer.

                    3.2.5. Without Cause By Employer. Employer may, at its option, terminate the
Employment Term for any reason or no reason whatsoever (other than for the reasons set forth
elsewhere in this Section 3.2) by giving a Notice of Termination to Executive. The Notice of
Termination shall specify the Date of Termination, which date shall not be earlier than thirty (30)
days after the Notice of Termination is given.

                    3.2.6. Employer’s Material Breach. Executive may, at his option, terminate the
Employment Term upon Employer’s material breach of this Agreement and the continuation of such
breach for more than ten (10) days after written demand for cure of such breach is given to
Employer by Executive (which demand shall identify the manner in which Employer has materially
breached this Agreement). Employer’s material breach of this Agreement shall mean (i) the failure
of Employer to make any payment that it is required to

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make hereunder to Executive when such payment is due or within two (2) business days
thereafter; (ii) the assignment to Executive, without Executive’s express written consent, of
duties inconsistent with his positions, responsibilities and status with Employer, or a change in
Executive’s reporting responsibilities, titles or offices or any plan, act, scheme or design to
constructively terminate the Executive, or any removal of Executive from his positions with
Employer, except in connection with the termination of the Employment Term by Employer for Cause,
without Cause or Disability or as a result of Executive’s death or voluntary resignation or by
Executive other than pursuant to this Section 3.2.6; (iii) a reduction by Employer in Executive’s
Base Salary; or (iv) a permanent reassignment of Executive’s primary work location, without the
consent of Executive, to a location more than 35 miles from Employer’s executive offices in
Woodcliff Lake, New Jersey.

               3.3. Certain Obligations of Employer Following Termination of the Employment Term.
Following termination of the Employment Term under the circumstances described below, Employer
shall pay to Executive or his estate, as the case may be, the following compensation and provide
the following benefits in full satisfaction and final settlement of any and all claims and demands
that Executive now has or hereafter may have hereunder against Employer. In connection with
Executive’s receipt of any or all monies and benefits to be received pursuant to this Section 3.3,
Executive shall not have a duty to seek subsequent employment during the period in which he is
receiving severance payments and the Severance Amount (as defined in Section 3.3.2 hereof) shall
not be reduced solely as a result of Executive’s subsequent employment by an entity other than
Employer.

                    3.3.1. For Cause. In the event that the Employment Term is terminated by Employer for
Cause, Employer shall pay to Executive, in a single lump-sum, an amount equal to any unpaid but
earned Base Salary through the Date of Termination.

                    3.3.2. Without Cause by Employer; Material Breach by Employer; Non-Renewal by
Employer. In the event that the Employment Term is terminated by Employer pursuant to Section
3.2.5 hereof or by Executive pursuant to Section 3.2.6 hereof, or is not renewed by Employer
pursuant to Section 3.1 hereof, Employer shall pay to Executive severance in an amount equal to
two (2) times his Base Amount. For purposes hereof, “Base Amount” shall mean the Base Salary in
effect at such applicable time plus, if Executive’s termination is not a result of, in whole or in
part, Executive’s performance in respect of his duties hereunder, the amount of Executive’s last
annual cash bonus pursuant to Section 2.3 hereof. Any payments made in accordance with this
Section 3.3.2 shall be made in twenty-four (24) equal monthly installments from the Date of
Termination in accordance with Employer’s regular payroll practices, subject to Executive’s
continued compliance with the terms of Section 4 hereof and the execution by Executive of
Employer’s standard form Release Agreement in effect at the time.

                    3.3.3. Without Cause By Executive; Election Not to Renew by Executive. In the event
that the Employment Term is terminated by Executive pursuant to Section 3.2.2 hereof or Executive
elects not to renew this Agreement pursuant to Section 3.1 hereof, Employer shall pay to Executive,
in a single lump-sum, an amount equal to any unpaid but earned Base Salary through the Date of
Termination.

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                    3.3.4. Death, Disability. In the event that the Employment Term is terminated by
reason of Executive’s death pursuant to Section 3.2.1 hereof or by Employer by reason of
Executive’s Disability pursuant to Section 3.2.3 hereof, Employer shall pay to Executive, subject
to, in the case of Disability, Executive’s continued compliance with Section 4 hereof, the
Severance Amount, less any life insurance and/or disability insurance received by Executive or his
estate pursuant to insurance policies provided by Employer (including pursuant to Section 2.5.5
hereof), payable in accordance with Section 3.3.2 hereof.

                    3.3.5. Post-Employment Term Benefits. In the event Executive is terminated pursuant
to Sections 3.2.1 through 3.2.6 hereof, inclusive, or either Employer or Executive elects not to
renew this Agreement pursuant to Section 3.1 hereof, Employer shall reimburse Executive for any
unpaid expenses pursuant to Section 2.5.1 hereof, and Executive will have the opportunity and
responsibility to elect COBRA continuation coverage pursuant to the terms of that law and will thus
be responsible for the execution of the continuation of coverage forms upon termination of his
insurance coverage. Except as provided immediately below, Executive will be responsible for all
COBRA payments. Specifically, if Executive is terminated pursuant to Sections 3.2.3, 3.2.5 or
3.2.6 hereof, or Employer elects not to renew this Agreement pursuant to Section 3.1 hereof,
Executive shall be entitled to participate, at Employer’s expense, in all medical and health plans
and programs of Employer in accordance with COBRA for a period of eighteen (18) months (the
“Benefits Period”), subject to the execution by Executive of Employer’s standard form Release
Agreement in effect at the time and Executive’s continued compliance with the terms of Section 4
hereof; provided, that Executive’s continued participation is legally possible under the
general terms and provisions of such plans and programs; and provided, further,
that in the event Executive is entitled to equal or comparable benefits from a subsequent employer
during the Benefits Period, Employer’s obligation with respect thereto pursuant to this Section
3.3.5 shall end as of such date.

                    3.3.6. Equity Awards.

                    (a) If, within twelve (12) months following a Change of Control (as defined in Section 3.4.1
hereof) of Employer, the Employment Term is terminated other than for Cause, then Executive (or his
estate) shall have twenty-four (24) months from the date of termination to exercise any vested
equity awards; provided, that the relevant equity award plan remains in effect and such
equity awards shall not have otherwise expired in accordance with the terms thereof. In connection
therewith, Employer agrees to use commercially reasonable efforts to amend Executive’s Equity Award
Agreements if necessary to effectuate the provisions of this Section 3.3.6(a).

                    (b) In the event that the Initial Term is not renewed by Employer pursuant to Section 3.1
hereof, then the Sign-On Equity Award granted to Executive shall thereupon vest and Executive shall
have twenty-four (24) months from such date to exercise such options. In addition, in the event
the Employment Term is terminated (i) by Employer pursuant to Section 3.2.5 hereof and the reason
for such termination is not related to the performance of Executive in his duties with respect to
Employer, or (ii) by Executive pursuant to Section 3.2.6 hereof, then all equity awards theretofore
granted to Executive shall thereupon vest and Executive shall have twenty-four (24) months from
such date to exercise such options. The provisions of this Section 3.3.6(b) shall only be
effective if and to the extent that

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the relevant equity award plan remains in effect and such equity awards shall not have
otherwise expired in accordance with the terms thereof. In connection therewith, Employer agrees
to use commercially reasonable efforts to amend Executive’s Equity Award Agreements if necessary to
effectuate the provisions of this Section 3.3.6(b).

               3.4. Definitions.

                    3.4.1. “Change of Control” Defined. A “Change of Control” of Employer means (i) the
approval by the stockholders of Par of the sale, lease, exchange or other transfer (other than
pursuant to internal reorganization) by Par of all or substantially all of its respective assets to
a single purchaser or to a group of associated purchasers; (ii) the first purchase of shares of
equity securities of Par pursuant to a tender offer or exchange offer (other than an offer by Par)
for at least fifteen (15%) percent of the equity securities of Par; (iii) the approval by the
stockholders of Par of an agreement for a merger or consolidation in which Par shall not survive as
an independent, publicly-owned corporation; (iv) the acquisition (including by means of a merger)
by a single purchaser or a group of associated purchasers of securities of Par from either Par or
any third party representing thirty-five (35%) percent or more of the combined voting power of
Par’s then outstanding equity securities in one or a related series of transactions (other than
pursuant to an internal reorganization) or (v) the change of the membership of a majority of the
Board during any period of two (2) consecutive years, unless the election, or the nomination for
election by Par’s stockholders, of each new director was approved by a vote of at least two-thirds
of the directors of the Board still in office who were directors of Par at the beginning of the
period.

                    3.4.2. “Notice of Termination” Defined. “Notice of Termination” means a written
notice that indicates the specific termination provision relied upon by Employer or Executive and,
except in the case of termination pursuant to Sections 3.2.1, 3.2.2 or 3.2.5 hereof, that sets
forth in reasonable detail the facts and circumstances claimed to provide a basis for termination
of the Employment Term under the termination provision so indicated.

                    3.4.3. “Date of Termination” Defined. “Date of Termination” means such date as the
Employment Term is expired if not renewed or terminated in accordance with Sections 3.1 or 3.2
hereof.

          4. Confidentiality/ Non-Solicitation/Non-Compete.

               4.1. “Confidential Information” Defined. “Confidential Information” means any and all
information (oral or written) relating to Employer or any Subsidiary or any person controlling,
controlled by, or under common control with Employer or any Subsidiary or any of their respective
activities, including, but not limited to, information relating to: technology, research, test
procedures and results, machinery and equipment; manufacturing processes; financial information;
products; identity and description of materials and services used; purchasing; costs; pricing;
customers and prospects; advertising, promotion and marketing; and selling, servicing and
information pertaining to any governmental investigation, except such information which becomes
public, other than as a result of a breach of the provisions of Section 4.2 hereof. Without
limiting the foregoing, Confidential Information shall also include all information related to
products targeted for development by Employer and/or its Subsidiaries,

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subjects of research and development, projected launch dates, the United States Food and Drug
Administration (FDA) protocols, projected dates for regulatory filings, consumers studies, market
research, clinical research, business plans, content of the New Product Planning Committee
meetings, planned expenditures, profit margins, strategic evaluation plans and initiatives, and
those commissioned by Employer through outside vendors or consultants, and the content of all
business and strategic planning conducted with or through third parties. Executive’s obligation
not to disclose Confidential Information shall be as set forth in Section 4.2 of this Agreement,
and shall include his obligation not to place himself in any business position in which use or
disclosure of Employer’s confidences will be likely, expected or inevitable, for his own benefit or
the benefit of any other person or entity.

               4.2. Non-disclosure of Confidential Information. Executive shall not at any time
(other than as may be required or appropriate in connection with the performance by him of his
duties hereunder), directly or indirectly, use, communicate, disclose or disseminate any
Confidential Information in any manner whatsoever for the benefit of any person or entity other
than Employer (except as may be required under legal process by subpoena or other court order).

               4.3. Non-Solicitation. Executive shall not, while employed by Employer and for a
period of two (2) years following the Date of Termination, directly or indirectly, hire, offer to
hire, entice away or in any other manner persuade or attempt to persuade any officer, employee,
agent, lessor, lessee, licensor, licensee, customer, prospective customer, or supplier of Employer
or any of its Subsidiaries to discontinue or alter his or its relationship with Employer or any of
its Subsidiaries.

               4.4. Non-Competition. Executive shall not, while employed by Employer and for a
period equal to the longer of either (a) the Initial Term as defined Section 3.1 hereof, or (b) one
year following the Date of Termination, directly or indirectly provide any services (whether in the
management, sales, marketing, public relations, finance, research, development, general office,
administrative, or other areas) as an employee, agent, stockholder, officer, director, consultant,
advisor, investor, or other representative of Employer’s competitors in the branded or generic
pharmaceutical industry in any state or country in which Employer does or seeks to do business.
Employer’s competitors include any entity, individual, or affiliate of such company or individual
that develops, sells, markets, or distributes any products that compete with or are the same or
similar to those of Employer. However, the restrictions of this paragraph 4.4 shall not apply if
the Employment Term is terminated by Employer pursuant to Section 3.2.5 hereof or by Executive
properly pursuant to Section 3.2.6 hereof; nor shall this paragraph prohibit Executive from being a
passive owner of not more than one percent (1%) of any publicly-traded class of capital stock of
any entity engaged in a competing business.

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               4.5. Injunctive Relief. The parties hereby acknowledge and agree that (a) the type, scope
and periods of restrictions imposed in paragraph 4 are necessary, fair and reasonable to protect
Employer’s legitimate business interests and to prevent the inevitable disclosure of Employer’s
Confidential Information; (b) Employer will be irreparably injured in the event of a breach by
Executive of any of his obligations under this Section 4; (c) monetary damages will not be an
adequate remedy for any such breach; (d) Employer will be entitled to injunctive relief, in
addition to any other remedy which it may have, in the event of any such breach; and (e) the
existence of any claims that Executive may have against Employer, whether under this Agreement or
otherwise, will not be a defense to the enforcement by Employer of any of its rights under this
Section 4.

               4.6. Non-exclusivity and Survival. The covenants of Executive contained in this
Section 4 are in addition to, and not in lieu of, any obligations that Executive may have with
respect to the subject matter hereof, whether by contract, as a matter of law or otherwise, and
such covenants and their enforceability shall survive any termination of the Employment Term by
either party and any investigation made with respect to the breach thereof by Employer at any time.

          5. Miscellaneous Provisions.

               5.1. Severability. If, in any jurisdiction, any term or provision hereof is
determined to be invalid or unenforceable, (a) the remaining terms and provisions hereof shall be
unimpaired; (b) any such invalidity or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction; and (c) the invalid or unenforceable
term or provision shall, for purposes of such jurisdiction, be deemed replaced by a term or
provision that is valid and enforceable and that comes closest to expressing the intention of the
invalid or unenforceable term or provision.

               5.2. Execution in Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each of which shall be
deemed to be an original but all of which taken together shall constitute one and the same
agreement (and all signatures need not appear on any one counterpart), and this Agreement shall
become effective when one or more counterparts has been signed by each of the parties hereto and
delivered to each of the other parties hereto.

               5.3. Notices. All notices, requests, demands and other communications hereunder shall
be in writing and shall be deemed duly given upon receipt when delivered by hand, overnight
delivery or telecopy (with confirmed delivery), or three (3) business days after posting, when
delivered by registered or certified mail or private courier service, postage prepaid, return
receipt requested, as follows:

If to Employer, to:

Par Pharmaceutical Companies, Inc.

300 Tice Boulevard

Woodcliff Lake, New Jersey 07677

Attention: Chairman

Telecopy No. 201-802-4620

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Copy to:

Christine A. Amalfe, Esq.

Gibbons, Del Deo, Dolan, Griffinger & Vecchione, P.C.

One Riverfront Plaza

Newark, New Jersey 07102-5496

Telecopy No.: (201) 639-6230

If to Executive, to:

Gerard Martino

c/o Par Pharmaceutical, Inc.

300 Tice Boulevard

Woodcliff Lake, New Jersey 07677

or to such other address(es) as a party hereto shall have designated by like notice to the other
parties hereto.

               5.4. Amendment. No provision of this Agreement may be modified, amended, waived or
discharged in any manner except by a written instrument executed by both Par and Executive.

               5.5. Entire Agreement. This Agreement and, with respect to Section 3.3.6 hereof,
Executive’s Equity Award Agreements and governing equity award plans, constitute the entire
agreement of the parties hereto with respect to the subject matter hereof, and supersede all prior
agreements and understandings of the parties hereto, oral or written. In the event of any conflict
between Section 3.3.6 hereof and Executive’s Equity Award Agreements and the governing equity award
plans, Section 3.3.6 shall govern.

               5.6. Applicable Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of New Jersey applicable to contracts made and to be wholly performed
therein.

               5.7. Headings. The headings contained herein are for the sole purpose of convenience
of reference, and shall not in any way limit or affect the meaning or interpretation of any of the
terms or provisions of this Agreement.

               5.8. Binding Effect; Successors and Assigns. Executive may not delegate any of his
duties or assign his rights hereunder. This Agreement shall inure to the benefit of, and be binding
upon, the parties hereto and their respective heirs, legal representatives, successors and
permitted assigns. Employer shall require any successor (whether direct or indirect and whether by
purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or
assets of Employer, by an agreement in form and substance reasonably satisfactory to Executive, to
expressly assume and agree to perform this Agreement in the same manner and to the same extent that
Employer would be required to perform if no such succession had taken place.

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               5.9. Waiver, etc. The failure of either of the parties hereto to at any time enforce
any of the provisions of this Agreement shall not be deemed or construed to be a waiver of any such
provision, nor to in any way affect the validity of this Agreement or any provision hereof or the
right of either of the parties hereto thereafter to enforce each and every provision of this
Agreement. No waiver of any breach of any of the provisions of this Agreement shall be effective
unless set forth in a written instrument executed by the party against whom or which enforcement of
such waiver is sought, and no waiver of any such breach shall be construed or deemed to be a waiver
of any other or subsequent breach.

               5.10. Capacity, etc. Executive and Employer hereby represent and warrant to the other
that, as the case may be: (a) he or it has full power, authority and capacity to execute and
deliver this Agreement, and to perform his or its obligations hereunder; (b) such execution,
delivery and performance shall not (and with the giving of notice or lapse of time or both would
not) result in the breach of any agreements or other obligations to which he or it is a party or he
or it is otherwise bound; and (c) this Agreement is his or its valid and binding obligation in
accordance with its terms.

               5.11. Enforcement; Jurisdiction. If any party institutes legal action to enforce or
interpret the terms and conditions of this Agreement, the prevailing party shall be awarded
reasonable attorneys’ fees at all trial and appellate levels, and the expenses and costs incurred
by such prevailing party in connection therewith. Any legal action, suit or proceeding, in equity
or at law, arising out of or relating to this Agreement shall be instituted exclusively in the
State or Federal courts located in the State of New Jersey, and each party agrees not to assert, by
way of motion, as a defense or otherwise, in any such action, suit or proceeding, any claim that
such party is not subject personally to the jurisdiction of any such court, that the action, suit
or proceeding is brought in an inconvenient forum, that the venue of the action, suit or proceeding
is improper or should be transferred, or that this Agreement or the subject matter hereof may not
be enforced in or by any such court. Each party further irrevocably submits to the jurisdiction of
any such court in any such action, suit or proceeding. Any and all service of process and any other
notice in any such action, suit or proceeding shall be effective against any party if given
personally or by registered or certified mail, return receipt requested or by any other means of
mail that requires a signed receipt, postage prepaid, mailed to such party as herein provided.
Nothing herein contained shall be deemed to affect or limit the right of any party to serve process
in any other manner permitted by applicable law.

               5.12. Arbitration.

                    (a) Any dispute under Section 3 hereof, including, but not limited to, the determination by
the Board of a termination for Cause pursuant to Section 3.2.4 hereof, or in respect of the breach
thereof shall be settled by arbitration in New Jersey. The arbitration shall be accomplished in
the following manner. Either party may serve upon the other party written demand that the dispute,
specifying the nature thereof, shall be submitted to arbitration. Within ten (10) days after such
demand is given in accordance with Section 5.3 hereof, each of the parties shall designate an
arbitrator and provide written notice of such appointment upon the other party. If either party
fails within the specified time to appoint such arbitrator, the other party shall be entitled to
appoint both arbitrators. The two (2) arbitrators so appointed shall appoint a third arbitrator. If
the two arbitrators appointed fail to agree upon a

11

 

third arbitrator within ten (10) days after their appointment, then an application may be made
by either party hereto, upon written notice to the other party, to the American Arbitration
Association (the “AAA”), or any successor thereto, or if the AAA or its successor fails to appoint
a third arbitrator within ten (10) days after such request, then either party may apply, with
written notice to the other, to the Superior Court of New Jersey, Bergen County, for the
appointment of a third arbitrator, and any such appointment so made shall be binding upon both
parties hereto.

                    (b) The decision of the arbitrators shall be final and binding upon the parties. The party
against whom the award is rendered (the “non-prevailing party”) shall pay all fees and expenses
incurred by the prevailing party in connection with the arbitration (including fees and
disbursements of the prevailing party’s counsel), as well as the expenses of the arbitration
proceeding. The arbitrators shall determine in their decision and award which of the parties is the
prevailing party, which is the non-prevailing party, the amount of the fees and expenses of the
prevailing party and the amount of the arbitration expenses. The arbitration shall be conducted, to
the extent consistent with this Section 5.12, in accordance with the then prevailing rules of
commercial arbitration of the AAA or its successor. The arbitrators shall have the right to retain
and consult experts and competent authorities skilled in the matters under arbitration, but all
consultations shall be made in the presence of both parties, who shall have the full right to
cross-examine the experts and authorities. The arbitrators shall render their award, upon the
concurrence of at least two of their number, not later than thirty (30) days after the appointment
of the third arbitrator. The decision and award shall be in writing, and counterpart copies shall
be delivered to each of the parties. In rendering an award, the arbitrators shall have no power to
modify any of the provisions of this Agreement, and the jurisdiction of the arbitrators is
expressly limited accordingly. Judgment may be entered on the award of the arbitrators and may be
enforced in any court having jurisdiction.

          IN WITNESS WHEREOF, this Agreement has been executed and delivered by the parties hereto as of
the date first above written.

	 	 	 	 	 
	 	PAR PHARMACEUTICAL, INC.

 	 
	 	By:  	/s/ Stephen C. Montalto
 	 
	 	 	Name:  	Stephen C. Montalto 	 
	 	 	Title:  	Vice President, Human Resources 	 
	 

	 	 	 	 	 
	 

	 	/s/ Gerard Martino	 	 
	 	 	 	 	 
	 

	 	Gerard Martino
	 	 

12Exhibit 4.1

                STRATSSM CERTIFICATES SERIES SUPPLEMENT 2006-3

                                    between

                   SYNTHETIC FIXED-INCOME SECURITIES, INC.,
                                  as Trustor

                                      and

                             THE BANK OF NEW YORK,
                    as Trustee and Securities Intermediary

       STRATSSM TRUST FOR ALLSTATE CORPORATION SECURITIES, SERIES 2006-3

<PAGE>

                               TABLE OF CONTENTS

                                                                            Page
                                                                            ----

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

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

Section 2.  Creation and Declaration of Trust; Sale of Underlying
            Securities; Acceptance by Trustee................................6

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

Section 4.  Date of the Certificates.........................................7

Section 5.  Certificate Stated Amount and Denominations......................7

Section 6.  Currency of the Certificates.....................................7

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

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

Section 9.  Certain Provisions of Base Trust Agreement Not Applicable........8

Section 10. Distributions....................................................8

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

Section 12. Limitation of Powers and Duties.................................11

Section 13. Compensation of Trustee.........................................12

Section 14. Modification or Amendment of the Base Trust Agreement, the
            Series Supplement or the Swap Agreement.........................13

Section 15. Assignment of Rights under the Swap Agreement or IRFC
            Contracts.......................................................13

Section 16. Accounting......................................................14

Section 17. No Investment of Amounts Received on Underlying Securities......14

Section 18. No Event of Default.............................................14

Section 19. Notices.........................................................14

Section 20. Access to Certain Documentation.................................15

Section 21. Advances........................................................15

                                      i
<PAGE>

Section 22. Ratification of Agreement.......................................15

Section 23. Counterparts....................................................15

Section 24. Governing Law...................................................15

Section 25. Certificate of Compliance.......................................15

Section 26. Certain Filing to be Made by the Trustee........................15

Section 27. Establishment of Accounts.......................................16

Section 28. Statement of Intent.............................................16

Section 29. Filing of Partnership Returns...................................16

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

Section 31. Trustee's Entitlement Orders....................................17

Section 32. Conflict with Other Agreements..................................17

Section 33. Additional Trustee and Securities Intermediary
            Representations.................................................17

Section 34. Additional Trustor Representations..............................18

Section 35. Assessment and Attestation Requirements.........................18

Section 36. Additional Rights of the Swap Counterparty......................18

Section 37. Modification of Certain Provisions of Base Trust Agreement......18

Section 38. Evidence of Integration for Tax Purposes........................19

Section 39. [reserved]......................................................19

Section 40. Identification of Straddle for Tax Purposes. The Trustee
            retains Exhibit G on behalf of each Certificateholder...........19

Exhibit A -- Identification of the Underlying Securities as of Closing Date
Exhibit B -- Terms of the Certificates as of Closing Date
Exhibit C -- Form of Certificates
Exhibit D -- Form of Swap Agreement
Exhibit E -- Evidence of Integration for Tax Purposes
Exhibit F -- Form of IRFC Contracts
Exhibit G -- Identification of Straddle Position Under Section 1092(A)(2) of
             the Internal Revenue Code Purposes

                                      ii
<PAGE>

      STRATSSM SERIES SUPPLEMENT 2006-3, dated as of April 28, 2006 (this
      "Series Supplement"), between SYNTHETIC FIXED-INCOME SECURITIES, INC., a
      Delaware corporation, as Trustor (the "Trustor"), and THE BANK OF NEW
      YORK, a New York banking corporation as trustee (the "Trustee") and as
      securities intermediary (the "Securities Intermediary").

                             PRELIMINARY STATEMENT

            Pursuant to the Base Trust Agreement, dated as of February 28,
2006 (the "Base Trust Agreement" and, as supplemented pursuant to the Series
Supplement, the "Agreement"), between the Trustor and the Trustee, such
parties may at any time and from time to time enter into a series supplement
supplemental to the Base Trust Agreement for the purpose of creating a trust.
Section 5.13 of the Base Trust Agreement provides that the Trustor may at any
time and from time to time direct the Trustee to authenticate and deliver, on
behalf of any such trust, a new Series of trust certificates. Each trust
certificate of such new Series of trust certificates will represent a
fractional undivided beneficial interest in such trust. Certain terms and
conditions applicable to each such Series are to be set forth in the related
series supplement to the Base Trust Agreement.

            Pursuant to this Series Supplement, the Trustor and the Trustee
shall create and establish a new trust to be known as STRATSSM Trust For
Allstate Corporation Securities, Series 2006-3, and a new Series of trust
certificates to be issued thereby, which certificates shall be known as the
STRATSSM Certificates, Series 2006-3, and the Trustor and the Trustee shall
herein specify certain terms and conditions in respect thereof. The Trust
shall also enter into a swap agreement (the "Swap Agreement") pursuant to
which the Trust will exchange interest payments due on the Underlying
Securities for payments from the Swap Counterparty which will be passed
through to the Certificateholders and interest rate forward contracts (the
"IRFC Contracts") pursuant to which the IRFC Counterparty (as defined herein)
will be obligated to make certain payments to the Trust for each of the first
thirteen Distribution Dates which will be passed through to the
Certificateholders.

            The STRATSSM Certificates, Series 2006-3 shall be floating rate
Certificates (the "Certificates") issued in the form thereof set forth in
Exhibit C.

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

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

<PAGE>

            (b) Pursuant to Article I of the Base Trust Agreement, the meaning
of certain defined terms used in the Base Trust Agreement shall, when applied
to the trust certificates of a particular Series, be as defined in Article I
but with such additional provisions and modifications as are specified in the
related series supplement. With respect to the Certificates, the following
definitions shall apply:

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

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

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

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

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

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

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

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

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

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

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

            "Closing Date": April 28, 2006.

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

                                      2
<PAGE>

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

            "Corporate Trust Office": The Bank of New York, 101 Barclay
Street, New York, NY 10286 or such other corporate trust office as the Trustee
shall designate in writing to the Trustor and the Certificateholders.

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

            "Depositary": The Depositary Trust Company.

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

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

            "Final Scheduled Distribution Date": The Maturity Date.

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

            "IRFC Contracts": The ISDA Master Agreement (including the
Schedule thereto) dated as of the Closing Date, between the Trust and Wachovia
Bank, N.A., in its capacity as the IRFC counterparty, as supplemented by
Confirmation Number 1401515, 1401514, 1401513, 1401512, 1401508, 1401507,
1401506, 1401505, 1401504, 1401499, 1401498, 1401497, 1422829, in the form
attached hereto as Exhibit F.

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

            "IRFC Liquidation Amounts": The meaning provided in Section 10(b)
of this Series Supplement.

            "Maturity Date": April 1, 2036.

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

            "Payment Default": A default by the Underlying Securities Issuer
in the payment of any amount due on the Underlying Securities after the same
becomes due and payable on any

                                      3
<PAGE>

Underlying Securities Payment Date (and the expiration of any applicable grace
period on the Underlying Securities).

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

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

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

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

            "Regulation AB": Regulations promulgated by the Securities and
Exchange Commission and codified under 17 C.F.R. Subpart 229.1100.

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

            "Scheduled Distribution Date": (i) For so long as the Swap
Agreement shall not have been terminated the 1st day of each calendar month,
or, if any such day is not a Business Day, then the immediately following
Business Day, commencing May 1, 2006, until the date on which the Certificates
have been retired; provided, however, that payment on each Scheduled
Distribution Date shall be subject to prior payment of interest or principal,
as applicable, on the Underlying Securities or

            (ii) upon the occurrence of a Swap Agreement Termination Event
that is not also a Trust Termination Event, Scheduled Distribution Dates will
thereafter occur semi-annually on each April 1 and October 1, or the
immediately following Business Day, until the Certificates have been retired.

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

            "Specified Currency": United States Dollars.

            "Swap Agreement": The ISDA Master Agreement (including the
Schedule thereto) dated as of the Closing Date, referred to in the definition
of IRFC Contracts in this Section 1, between the Trust and Wachovia Bank,
N.A., in its capacity as the swap counterparty, as supplemented by
Confirmation Number 1393468, 1404674, in the form attached hereto as Exhibit
D.

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

                                      4
<PAGE>

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

            "Trust": STRATSSM Trust For Allsatate Corporation Securities,
Series 2006-3.

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

            "Underlying Securities": As of the Closing Date, $35,000,000 of
5.95% Notes due 2036 issued by the Underlying Securities Issuer, sold to the
Trustor by Wachovia Securities and identified on Exhibit A hereto.

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

            "Underlying Securities Issuer": The Allstate Corporation.

            "Underlying Securities Payment Date": The 1st day of each April
and October ending on April 1, 2036; provided, however, that if any Underlying
Securities Payment Date would otherwise fall on a day that is not a Business
Day, such Underlying Securities Payment Date will be the following Business
Day.

            "Underlying Securities Redemption Distribution Date": Any date on
which the payment of the principal of the Underlying Securities, either in
whole or in part, is paid to the Trustee.

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

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

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

                                      5
<PAGE>

            "Wachovia Securities": Wachovia Capital Markets, LLC.

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

            (b) The Trustor, acting as Depositor, does hereby sell, assign,
convey and set-over to the Trustee, on behalf and for the benefit of the
Trust, the Underlying Securities at a purchase price of $35,143,031 in cash.
The Trustee shall pay the full purchase price for the Underlying Securities by
delivering to Wachovia Securities, for the account of the Depositor, and as
the assignee of Depositor with respect to such amounts, (i) $34,946,350 on the
Closing Date and (ii) $196,681 on October 1, 2006, which represents the
accrued and unpaid interest of the Underlying Securities on the Closing Date.
The amounts to be paid to Wachovia Securities set forth in clause (i) above,
shall be paid from the proceeds of the issuance of the Certificates to be
received by the Trustee on the Closing Date. The amounts to be paid to
Wachovia Securities set forth in clause (ii) above, shall be paid from the
interest payment on the Underlying Securities to be received by the Trustee on
May 1, 2006. In the event that such interest payment on the Underlying
Securities is not received by the Trustee on such date or is otherwise
insufficient to pay such amount of accrued and unpaid interest to Wachovia
Securities, Wachovia Securities, for the account of the Depositor, and as
assignee of Depositor with respect to such amounts, shall have a claim for the
unpaid portion of such amount and shall share pari passu with
Certificateholders to the extent of such claim in the proceeds from the sale
or recovery of the Underlying Securities. The Trustor hereby instructs the
Trustee on behalf of and for the benefit of the Trust to enter into and
execute the Swap Agreement and the IRFC Contracts and perform the obligations
thereunder on behalf of the Trust, including, but not limited to, receiving
and returning any collateral posted by the Swap Counterparty in accordance
with the Swap Agreement. The Trustee shall enter into additional swap
agreements or other derivatives only if instructed to do so by the Trustor,
subject to consent from the Swap Counterparty and the Rating Agency Condition.

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

            Section 3. Designation. There is hereby created a Series of trust
certificates to be issued pursuant to the Base Trust Agreement and this Series
Supplement to be known as the "STRATSSM Certificates, Series 2006-3". The
Certificates shall have the terms provided for in this Series Supplement. The
Certificates shall be issued in the amount set forth in Section 5 and with the
additional terms set forth in Exhibit B to this Series Supplement. The
Certificates shall

                                      6
<PAGE>

be issued in substantially the form set forth in Exhibit C to this Series
Supplement with such necessary or appropriate changes as shall be approved by
the Trustor and the Trustee, such approval to be manifested by the execution
and authentication thereof by the Trustee. The Certificates shall evidence
undivided ownership interests in the assets of the Trust, subject to the
liabilities of the Trust and shall be payable solely from payments or property
received by the Trustee on or in respect of the Underlying Securities and the
Swap Agreement and the IRFC Contracts.

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

            Section 5. Certificate Stated Amount and Denominations. On the
Closing Date, up to 1,400,000 Certificates with an aggregate Stated Amount of
$35,000,000 may be authenticated and delivered under the Base Trust Agreement
and this Series Supplement. The Stated Amount of the Certificates shall equal
100% of the initial principal amount of Underlying Securities sold to the
Trustee and deposited in the Trust. Such Stated Amount shall be calculated
without regard to Certificates authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Certificates pursuant
to Sections 5.3, 5.4 or 5.5 of the Base Trust Agreement.

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

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

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

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

                                      7
<PAGE>

when and as required by the Swap Agreement, which the Trustee shall return to
the Swap Counterparty in accordance with the related Swap Agreement. In the
event any cash is held in the Collateral Account, the Trustee shall hold such
cash uninvested unless otherwise directed by the Trustor in writing.

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

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

            (b) If a Swap Agreement Termination Event has occurred for which
the Trust is the Defaulting Party or an Affected Party, the Trustee, first,
shall distribute all collections received on the Underlying Securities and
IRFC Liquidation Amounts to the Swap Counterparty until all amounts owing to
the Swap Counterparty under the Swap Agreement for payments in connection with
such Swap Agreement Termination Event (including any Unpaid Amounts) have been
paid in full and, second, shall distribute all remaining amounts to the
Certificateholders. If the distribution in the preceding sentence is
insufficient to pay in full all amounts owing to the Swap Counterparty, the
Trustee shall proceed to liquidate or distribute the Underlying Securities in
accordance with Section 10(h). Upon any liquidation of the Underlying
Securities, the Trustee, first, shall distribute the proceeds thereof to the
Swap Counterparty until all amounts owing to the Swap Counterparty have been
paid in full and, second, shall distribute all remaining amounts to the
Certificateholders. In the event of a Swap Agreement Termination Event, after
paying all amounts due to the Swap Counterparty as set forth in the first
sentence of this Section 10(b), if no Trust Termination Event has occurred,
all Interest Collections shall thereafter be distributed to Certificateholders
on each applicable Distribution Date. If a Swap Agreement Termination Event
has occurred for which the Swap Counterparty is the Defaulting Party or the
only Affected Party, notwithstanding the termination of the Swap Agreement,
the Trustee shall distribute any Unpaid Amounts to the Swap Counterparty from
Interest Collections on the Underlying Securities and IRFC Liquidation
Amounts. If at any time prior to the Distribution Date in May 2007, a Swap
Termination Event has occurred for which the Trust is the Defaulting Party or
an Affected Party, the Trustee shall liquidate any remaining IRFC Contracts in
accordance with the instructions of the Trustor and shall apply the proceeds
of such liquidation net of the Trustee' s expenses incurred in carrying out
the liquidation (the "IRFC

                                      8
<PAGE>

Liquidation Amounts") in the manner set forth herein. In executing any such
sale the Trustee shall solicit bids from three leading dealers in the relevant
market, as selected by the Trustor, one of which may include Wachovia
Securities.

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

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

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

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

            (g) If an SEC Reporting Failure occurs, then the Trustor shall
promptly notify the Trustee, the Swap Counterparty and the Rating Agency of
such SEC Reporting Failure and the Trustee shall, only if instructed by the
Trustor, proceed to liquidate or distribute the Underlying Securities in
accordance with Section 10(h).

            (h) If at any time, the Trustee is directed to sell the Underlying
Securities, the Trustee shall solicit bids for the sale of the Underlying
Securities with settlement thereof on or before the third (3rd) Business Day
after such sale from three leading dealers in the relevant market, which may
include but is not limited to any three of the following dealers: (1) Wachovia
Securities, (2) Goldman, Sachs & Co., (3) Lehman Brothers Inc., (4) Merrill
Lynch, Pierce,

                                      9
<PAGE>

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

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

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

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

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

                                      10
<PAGE>

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

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

            (c) In the event that there is any Posted Collateral remaining in
the Collateral Account upon a Trust Termination Event, the Trustee shall
return such remaining collateral to the Swap Counterparty no later than the
date of termination of the Trust.

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

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

            (c) The parties acknowledge that the Trustee, as the holder of the
Underlying Securities, has the right to vote and give consents and waivers in
respect of the Underlying Securities and enforce the other rights, if any, of
a holder of the Underlying Securities, except as otherwise limited by the Base
Trust Agreement or this Series Supplement. In the event that the Trustee
receives a request from the Underlying Securities Trustee, the Underlying
Securities Issuer or, if applicable, the Depositary with respect to the
Underlying Securities, for the Trustee's consent to any amendment,
modification or waiver of the Underlying Securities, or any document relating
thereto, or receives any other solicitation for any action with respect to the
Underlying Securities, the Trustee shall within two (2) Business Days mail a
notice of such proposed amendment, modification, waiver or solicitation to the
Swap Counterparty and each Certificateholder of record as of the date of such
request. The Trustee shall request instructions from the Certificateholders as
to what action to take in response to such request and shall be protected in
taking no action if no direction is received. Except as otherwise provided
herein, the Trustee shall consent or vote, or refrain from consenting or
voting, in the same proportion as the Certificates were actually voted or not
voted by the Holders thereof as of the date determined by the Trustee prior to
the date such vote or consent is required; provided, however, that,
notwithstanding anything to the contrary in the Base Trust Agreement or this
Series Supplement,

                                      11
<PAGE>

the Trustee shall at no time vote in favor of or consent to any matter (i)
which would alter the timing or amount of any payment on the Underlying
Securities (including, without limitation, any demand to accelerate the
Underlying Securities) or (ii) which would result in the exchange or
substitution of any Underlying Security whether or not pursuant to a plan for
the refunding or refinancing of such Underlying Security, except in each case
with the unanimous consent of the Certificateholders; provided, further, that
the Trustee shall not take any such action if it would affect the method,
amount or timing of payments due to the Swap Counterparty or otherwise
materially adversely affect the interests of the Swap Counterparty under the
Swap Agreement and result in a Swap Agreement Termination Event, in each case
without the prior written consent of the Swap Counterparty. The Trustee shall
have no liability for any failure to act or to refrain from acting resulting
from the Certificateholders' late return of, or failure to return, directions
requested by the Trustee from the Certificateholders.

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

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

            Section 13. Compensation of Trustee. The Trustee shall be entitled
to receive from the Trustor as compensation for its services hereunder (which
shall include the Trustee acting in any other capacity in this transaction
including, without limitation, as holder of collateral under any Credit
Support Instrument), trustee's fees pursuant to a separate agreement between
the Trustee and the Trustor, and shall be reimbursed for all reasonable
expenses, disbursements and advances incurred or made by it (including the
reasonable compensation, disbursements and expenses of its counsel and other
persons not regularly in its employ). The Trustor shall indemnify and hold
harmless the Trustee and its successors, assigns, agents and servants against
any and all loss, liability or reasonable expense (including attorney's fees)
incurred by it in connection with the administration of this trust and the
performance of its duties thereunder (which shall include the Trustee acting
in any other capacity in this transaction including, without limitation, as
holder of collateral under any Credit Support Instrument). The Trustee shall
notify the Trustor promptly of any claim for which it may seek indemnity.
Failure by the Trustee to so notify the Trustor shall not relieve the Trustor
of its obligations hereunder. The Trustor need not reimburse any expense or
indemnify against any loss, liability or expense incurred by the Trustee
through the Trustee's own willful misconduct, negligence or bad faith. The
indemnities contained in this Section 13 shall survive the resignation or
termination of the Trustee or the termination of this Agreement.

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

                                      12
<PAGE>

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

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

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

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

                                      13
<PAGE>

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

            Section 17. No Investment of Amounts Received on Underlying
Securities. All amounts received on or with respect to the Underlying
Securities and all payments made to the Trust on or with respect to the Swap
Agreement shall be held uninvested by the Trustee.

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

            Section 19. Notices. (a) All directions, demands and notices
hereunder and under the Agreement shall be in writing and shall be deemed to
have been duly given when received if personally delivered or mailed by first
class mail, postage prepaid or by express delivery service or by certified
mail, return receipt requested or delivered in any other manner specified
herein, (i) in the case of the Trustor, to Synthetic Fixed-Income Securities,
Inc., One Wachovia Center 301 South College Street, DC-7 Charlotte, NC 28288,
Attention: Structured Notes Desk, or such other address as may hereafter be
furnished to the Trustee in writing by the Trustor, and (ii) in the case of
the Trustee, to The Bank of New York, 101 Barclay Street, New York, NY 10286,
Attention: Corporate Trust, facsimile number (212) 815-2850, or such other
address as may hereafter be furnished to the Trustor in writing by the
Trustee.

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

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

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

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

                                      14
<PAGE>

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

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

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

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

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

            Section 24. Governing Law. This Series Supplement and each
Certificate issued hereunder shall be governed by and construed in accordance
with the laws of the State of New York applicable to agreements made and to be
performed entirely therein without reference to such State's principles of
conflicts of law to the extent that the application of the laws of another
jurisdiction would be required thereby, and the obligations, rights and
remedies of the parties hereunder shall be determined in accordance with such
laws. The State of New York is the securities intermediary's jurisdiction of
the Securities Intermediary for purposes of the UCC.

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

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

                                      15
<PAGE>

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

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

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

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

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

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

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

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

            Section 30. "Financial Assets" Election. The Securities
Intermediary hereby agrees that the Underlying Securities credited to the
Certificate Account and any Posted

                                      16
<PAGE>

Collateral credited to the Collateral Account shall be treated as a "financial
asset" within the meaning of Section 8-102(a)(9) of the UCC.

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

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

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

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

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

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

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

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

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

                                      17
<PAGE>

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

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

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

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

            Section 35. Assessment and Attestation Requirements. The Trustee
agrees to provide, at the Trustor's direction and expense (i) reports on
assessments of compliance with servicing criteria and (ii) attestation reports
on assessments of compliance with servicing criteria prepared by an
independent public accountant sufficient for the Trustor on behalf of the
Trust, both in order to satisfy the Trustor's obligations under Rules 13a-18
and 15d-18 of the Exchange Act and Items 1122 and 1123 of Regulation AB.

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

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

                                      18
<PAGE>

final payment on or other liquidation of the Underlying Securities and the
disposition of all amounts acquired therefrom in accordance with this
Agreement and the Swap Agreement and the disposition of the final payments
received under the Swap Agreement.

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

            Section 39. [reserved]

            Section 40. Identification of Straddle for Tax Purposes. The
Trustee retains Exhibit G on behalf of each Certificateholder.

                                      19
<PAGE>

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

                                       SYNTHETIC FIXED-INCOME SECURITIES, INC.

                                       By: /s/ Jeremy Swinson
                                          -------------------------------------
                                          Name:  Jeremy Swinson
                                          Title:  Vice President

                                       THE BANK OF NEW YORK, as Trustee and
                                       Securities Intermediary

                                      By: /s/ Kevin Pennant
                                          -------------------------------------
                                          Name:  Kevin Pennant
                                          Title: Assistant Vice President

<PAGE>

                                                                     EXHIBIT A

        IDENTIFICATION OF THE UNDERLYING SECURITIES AS OF CLOSING DATE

Underlying Securities Issuer:         The Allstate Corporation

Underlying Securities:                5.95% Notes due 2036

Maturity Date/Final                   Scheduled April 1, 2036
Distribution Date:

Original Principal Amount Issued:     $650,000,000.

CUSIP No.:                            020002AT8.

Stated Interest Rate:                 5.95% per annum

Interest Payment Dates:               April 1 and October 1

Principal Amount of Underlying        $35,000,000
Securities Deposited Under Trust
Agreement:

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

                                     A-1
<PAGE>

                                                                     EXHIBIT B

                 TERMS OF THE CERTIFICATES AS OF CLOSING DATE

Maximum Number of STRATSSM            1,400,000.
Certificates, Series 2006-3:

Aggregate Stated Amount of STRATSSM   $35,000,000.
Certificates, Series 2006-3:

Authorized Denomination:              $25 and integral multiples thereof.

Rating Agency:                        S&P.

Closing Date:                         April 28, 2006.

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

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

Initial Certificate Registrar:        The Bank of New York

Corporate Trust Office:               The Bank of New York, 101 Barclay
                                      Street, New York, NY 10286 Attention:
                                      Corporate Trust Department, Regarding
                                      STRATSSM Trust For Allstate Corporation
                                      Securities, Series 2006-3

                                     B-1
<PAGE>

                                                                     EXHIBIT C

                              FORM OF CERTIFICATE

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

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITARY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY
(AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE, OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

CERTIFICATE NUMBER:      1               $35,000,000 Certificate Stated Amount
CUSIP:   86310N202                                      1,400,000 Certificates
CERTIFICATE INTEREST RATE:                              Variable Floating Rate

                     STRATSSM CERTIFICATES, SERIES 2006-3

evidencing an undivided interest in the Trust, as defined below, the assets of
which include $35,000,000 of 5.95% Notes issued by the Underlying Securities
Issuer.

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

      THIS CERTIFIES THAT Cede & Co. is the registered owner of a
nonassessable, fully-paid, fractional undivided interest in STRATSSM Trust For
Allstate Corporation Securities, Series 2006-3 (the "Trust") formed by
SYNTHETIC FIXED-INCOME SECURITIES, INC., as Trustor (the "Trustor") evidenced
by Certificates in the number and the Stated Amount set forth above.

      The Trust was created pursuant to a Base Trust Agreement, dated as of
February 28, 2006 (as amended and supplemented, the "Agreement"), between the
Trustor and The Bank of New York, a New York banking corporation, not in its
individual capacity but solely as Trustee (the "Trustee"), as supplemented by
the STRATSSM Certificates Series Supplement 2006-3, dated as

                                     C-1
<PAGE>

of April 28, 2006 (the "Series Supplement" and, together with the Agreement,
the "Trust Agreement"), between the Trustor and the Trustee. This Certificate
does not purport to summarize the Trust Agreement and reference is hereby made
to the Trust Agreement for information with respect to the interests, rights,
benefits, obligations, proceeds and duties evidenced hereby and the rights,
duties and obligations of the Trustee with respect hereto. A copy of the Trust
Agreement may be obtained from the Trustee by written request sent to the
Corporate Trust Office. Capitalized terms used but not defined herein have the
meanings assigned to them in the Trust Agreement.

      This Certificate is one of the duly authorized Certificates designated
as "STRATSSM Certificates, Series 2006-3 (herein called the "Certificate" or
"Certificates"). This Certificate is issued under and is subject to the terms,
provisions and conditions of the Trust Agreement, to which Trust Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound. The assets of the Trust include the Underlying
Securities, all proceeds of the Underlying Securities and the Trust's rights
under the Swap Agreement and the IRFC Contracts.

      Under the Trust Agreement, there shall be distributed on the dates
specified in the Trust Agreement (a "Distribution Date"), to the person in
whose name this Certificate is registered at the close of business on the
related Record Date, such Certificateholder's fractional undivided interest in
the amount of distributions of the Underlying Securities to be distributed to
Certificateholders on such Distribution Date and distributions to the Trust
under the Swap Agreement and the IRFC Contracts. The Underlying Securities
will pay interest on April 1 and October 1 of each year. The principal of the
Underlying Securities is scheduled to be paid on April 1, 2036. The Swap
Agreement provides for payments on the 1st calendar day of each month,
commencing on May 1, 2006. The IRFC Contracts provide for certain payments by
the IRFC Counterparty to the Trust on each of the first thirteen Distribution
Dates.

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

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

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

      By acceptance of a Certificate, each Certificateholder (1) elects to
integrate the Underlying Securities and the Swap Agreement for United States
federal income tax purposes,

                                     C-2
<PAGE>

(2) authorizes and directs the trustee (or the trustee's agent) to retain, as
part of the Certificateholder's books and records, information that (a)
describes the Underlying Securities and the Swap Agreement, (b) identifies the
two positions as integrated for federal income tax purposes and (c) describes
the features of the resulting "synthetic" debt instrument and (3) agrees to
retain copies of such information as provided to the Certificateholder by the
Trust.

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

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

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

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

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

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

                                     C-3
<PAGE>

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

                                       STRATSSM TRUST FOR ALLSTATE
                                       CORPORATION SECURITIES, SERIES 2006-3

                                       By:  THE BANK OF NEW YORK, not in its
                                       individual capacity but solely as
                                       Trustee

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

Dated:  April 28, 2006

                   TRUSTEE'S CERTIFICATE OF AUTHENTICATION

This is one of the STRATSSM Certificates, Series 2006-3, described in the
Trust Agreement referred to herein.

THE BANK OF NEW YORK,
not in its individual capacity but solely as Trustee

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

                                     C-4
<PAGE>

                                  ASSIGNMENT

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

PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE

-------------------------------------------------------------------------------

(Please print or type name and address, including postal zip code, of
assignee) __________________________ the within Certificate, and all rights
thereunder, hereby irrevocably constituting and appointing __________________
Attorney to transfer said Certificate on the books of the Certificate
Register, with full power of substitution in the premises.

Dated:

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

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

                                     C-5
<PAGE>

                                                                     EXHIBIT D

                            FORM OF SWAP AGREEMENT

                                     D-1
<PAGE>

                                                                     EXHIBIT E

                   EVIDENCE OF INTEGRATION FOR TAX PURPOSES

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

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

      The Trust acquired the qualifying debt instrument on April 28, 2006 and
      entered into the Section 1.1275-6 hedge on the same date. Each
      Certificateholder simultaneously acquires its interest in the qualifying
      debt instrument and enters into the Section 1.1275-6 hedge on the trade
      date identified in the trade confirmation for the purchase of
      Certificates.

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

      The qualifying debt instrument is $35,000,000 in aggregate principal
      amount of 5.95% Notes Due 2036 issued by The Allstate Corporation. The
      Section 1.1275-6 hedge is a swap agreement between the Trust and
      Wachovia Bank, N.A., as evidenced by an ISDA Master Agreement (including
      a schedule thereto) dated as of April 28, 2006 and as supplemented by a
      confirmation number 1381326, 1381327, in the form attached to this
      series supplement as Exhibit D.

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

            A single principal payment of $35,000,000 is payable on the
maturity date of April 1, 2036. Interest payments at the three-month Treasury
Bill rate plus 0.90% per annum (but no more than 7.50% per annum) (each such
interest payment, an "Interest Payment") are payable on the 15th day of each
calendar month (or if the 15th calendar day is not a business day, on the next
succeeding business day).

            For any Interest Period (as hereinafter defined), the "three-month
Treasury Bill rate" will be, with respect to any Interest Period, the
USD-TBILL-H.15 rate for each Reset Date during the applicable Interest Period.

            For purposes hereof, the term "USD-TBILL-H.15 Rate" for any
Interest Period shall mean the rate for a Reset Date which appears on either
the Telerate Page 56 or the Telerate Page 57 opposite the three month
designated maturity under the heading "INVEST RATE." If United States Treasury
bills of the three month designated maturity have been auctioned on the Reset
Date for that Interest Period but such rate for such Reset Date does not
appear on either the Telerate Page 56 or the Telerate Page 57, the rate for
that Reset Date will be the Bond Equivalent

                                     E-1
<PAGE>

Yield of the rate set forth in H.15 Daily Update, or such other recognized
electronic source used for the purpose of displaying such rate, for that day
in respect of the three month designated maturity under the caption "U.S.
Government securities/Treasury bills/Auction high." If United States Treasury
bills of the three month designated maturity have been auctioned on the Reset
Date for that Interest Period but such rate for such Reset Date does not
appear on either the Telerate Page 56 or the Telerate page 57 and such rate is
not set forth in the H.15 Daily Update in respect of the three month
designated maturity under the caption "U.S. Government securities/Treasury
bills/Auction high" or another recognized electronic source, the rate for that
Reset Date will be the Bond Equivalent Yield of the auction rate for those
Treasury bills as announced by the United States Department of the Treasury.
If the United States Treasury bills of the three month designated maturity are
not auctioned during any period of seven consecutive calendar days ending on,
and including, any Friday and the Reset Date for that Interest Period would
have occurred during that seven-day period, a Reset Date will be deemed to
have occurred on the day during that seven-day period on which such Treasury
bills would have been auctioned in accordance with the usual practices of the
United States Department of the Treasury, and the rate for that Reset Date
will be determined as if the parties had specified "USD-TBILL-Secondary
Market" as the applicable USD-TBILL-H.15 Rate. For purposes hereof, the terms
"Bond Equivalent Yield", "H.15 Daily Update" and "USD-TBILL-Secondary Market"
shall each have the meanings set forth in the Swap Agreement, and the term
"Reset Date," for each Interest Period, shall mean the last Monday prior to
the first day of such Interest Period.

             "Interest Period" means, with respect to the first distribution
date, the period from and including the original issue date of the
Certificates to, but excluding, May 1, 2006, and thereafter, so long as the
Swap Agreement is in effect, the period from and including the 1st day of the
preceding calendar month to, but excluding, the 1st day of the current
calendar month.

            For each Interest Period, the term "Reset Date" means the last
Monday prior to the first day of such Interest Period.

            "Telerate Page 56" and "Telerate Page 57" mean the display pages
so designated on Moneyline's Telerate Service (or such other page as may
replace that page on that service, or such other service as may be nominated
as the information vendor, for the purpose of displaying the USD-TBILL-H.15
rate).

                                     E-2
<PAGE>

                                                                     EXHIBIT F

                            FORM OF IRFC CONTRACTS

                                     F-1
<PAGE>

                                                                     EXHIBIT G

 IDENTIFICATION OF STRADDLE POSITIONS UNDER SECTION1092(A)(2) OF THE INTERNAL
                            REVENUE CODEX PURPOSES

            This information is retained on behalf of each Certificateholder
and is intended to comply with the requirements imposed by Section 1092(A)(2)
of the Internal Revenue Code.

            This identification is made as of this April 28, 2006. and as of
each date that a Certificateholder acquires a Certificate. For April 28, 2006,
The positions identified are the Certificateholder's proportionate interest in
the following:

            The debt instrument of $35,000,000 in aggregate principal amount
of 5.95% Notes Due 2036 issued by The Allstate Corporation.

            The swap agreement between the Trust and Wachovia Bank, N.A., as
evidenced by an ISDA Master Agreement (including a schedule thereto) dated as
of April 28, 2006 and as supplemented by a confirmation number 1393468,
1404674, in the form attached to this series supplement as Exhibit D.

            The forward rate agreements between the Trust and Wachovia Bank,
N.A., as evidenced by an ISDA Master Agreement (including a schedule thereto)
dated as of April 28, 2006 and as supplemented by a confirmation numbers
1401515, 1401514, 1401513, 1401512, 1401508, 1401507, 1401506, 1401505,
1401504, 1401499, 1401498, 1401497, 1422829.

            After April 28, 2006 and as of each date that a Certificateholder
acquires a Certificate ("Acquisition Date"). The positions identified are the
Certificateholder's proportionate interest in the following:

            The debt instrument of $35,000,000 in aggregate principal amount
of 5.95% Notes Due 2036 issued by The Allstate Corporation.

            The swap agreement between the Trust and Wachovia Bank, N.A., as
evidenced by an ISDA Master Agreement (including a schedule thereto) dated as
of April 28, 2006 and as supplemented by a confirmation number 1393468,
1404674, in the form attached to this series supplement as Exhibit D.

            Each remaining forward rate agreement on such Acquisition Date.
For this purpose "each remaining forward rate agreement" shall mean each of
those forward rate agreements between the Trust and Wachovia Bank, N.A., as
evidenced by an ISDA Master Agreement (including a schedule thereto) dated as
of April 28, 2006 as supplemented by a confirmation numbers 1401515, 1401514,
1401513, 1401512, 1401508, 1401507, 1401506, 1401505, 1401504, 1401499,
1401498, 1401497, 1422829, for which, as of the Acquisition Date, the
termination date (within the meaning of such forward rate agreements) has not
occurred.

                                     G-1

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