Exhibit 1
SYNTHETIC FIXED-INCOME SECURITIES, INC.
STRATS(SM) TRUST FOR NEWS CORPORATION SECURITIES, SERIES 2006-4
UNDERWRITING AGREEMENT
September 8, 2006
WACHOVIA CAPITAL MARKETS, LLC
RBC XXXX XXXXXXXX INC
c/o Wachovia Capital Markets, LLC
One Wachovia Center
000 X. Xxxxxxx Xx.
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Ladies and Gentlemen:
Synthetic Fixed-Income Securities, Inc. (the "Depositor"), a Delaware
corporation, proposes to form a trust (the "Trust"), which will issue and sell a
series (a "Series") of its STRATS(SM) Certificates registered under the
registration statement referred to in Section 1(a) hereof (the "Certificates").
The primary assets (the "Primary Assets") of the Trust will be (i) $33,000,000
(by aggregate liquidation amount) of $33,000,000 of 7.90% corporate bonds due
2095 issued by News America Holdings Incorporated (now known as News America
Inc.) (the "Underlying Securities") and (ii) all payments on, or collections in
respect of, the Underlying Securities received after September 8, 2006, together
with any and all income, proceeds and payments with respect thereto. The
Certificates will evidence a proportionate undivided beneficial ownership
interest in certain distributions of the Trust. The Certificates will be issued
by the Trust, pursuant to a Base Trust Agreement, dated as of September 8, 2006,
(the "Base Trust Agreement") between the Depositor and U.S. Bank Trust National
Association, as trustee (the "Trustee"), as supplemented by a Series Supplement,
dated as of September 8, 2006 (the "Series Supplement" and, together with the
Base Trust Agreement, the "Trust Agreement"). Wachovia Capital Markets, LLC and
RBC Xxxx Xxxxxxxx Inc (collectively, the "Underwriters") pursuant to this
agreement (the "Underwriting Agreement" or "this Agreement") are purchasing the
Certificates set forth next to their respective names at the prices set forth on
Schedule I hereto, except that the amount purchased by each Underwriter may
change in accordance with Section 10 of this Underwriting Agreement.
Capitalized terms used and not otherwise defined herein shall have the
meanings assigned thereto in the Trust Agreement. This Underwriting Agreement
and the Trust Agreement are referred to together herein as the "Operative
Agreements".
SECTION 1. Representations and Warranties of the Depositor. The Depositor
represents and warrants to, and agrees with the Underwriter that:
(a) A Registration Statement on Form S-3 (No. 333-111858) with
respect to the Certificates (i) has been prepared by the Depositor in conformity
with the requirements of the Securities Act of 1933, as amended (the "Securities
Act"), and the rules and regulations (the "Rules and Regulations") of the United
States Securities and Exchange Commission (the "Commission") thereunder, (ii)
has been filed with the Commission under the Securities Act and (iii) has become
effective under the Securities Act. Copies of such Registration Statement have
been delivered by the Depositor to the Underwriters. As used in this
Underwriting Agreement, "Effective Time" means the date and the time as of which
such Registration Statement, or the most recent post-effective amendment
thereto, if any, was declared effective by the Commission; "Effective Date"
means the date of the Effective Time; "Registration Statement" means such
registration statement, at the Effective Time, including any documents
incorporated by reference therein at such time; and "Prospectus" means the final
prospectus dated August 17, 2006, as supplemented by the final prospectus
supplement dated September 8, 2006 (the "Prospectus Supplement") relating to the
Certificates, to be filed with the Commission pursuant to paragraphs (2), (3) or
(5) of Rule 424(b) of the Rules and Regulations. Reference made herein to the
Prospectus shall be deemed to refer to and include any documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the Securities Act as of
the date of the Prospectus and any reference to any amendment or supplement to
the Prospectus shall be deemed to refer to and include any document filed under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), after the
date of such Prospectus, as the case may be, and incorporated by reference in
such Prospectus, as the case may be, and any reference to any amendment to the
Registration Statement shall be deemed to include any report of the Depositor
filed with the Commission pursuant to Section 13(a) or 15(d) of the Exchange Act
after the Effective Time that is incorporated by reference in the Registration
Statement. The Commission has not issued any order preventing or suspending the
use of the Prospectus. There are no contracts or documents of the Depositor
which are required to be filed as exhibits to the Registration Statement
pursuant to the Securities Act or the Rules and Regulations which have not been
so filed or incorporated by reference therein on or prior to the Effective Date
of the Registration Statement. The conditions for use of Form S-3, as set forth
in the General Instructions thereto, have been satisfied.
(b) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will, when they become effective or are filed with the Commission, as
the case may be, conform in all respects to the requirements of the Securities
Act and the Rules and Regulations. The Registration Statement, as of the
Effective Date thereof and of any amendment thereto, did not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading. The
Prospectus as of its date, and as amended or supplemented as of the Closing
Date, does not and will not contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
provided, however, that no representation or warranty is made as to information
contained in or omitted from the Registration Statement or the Prospectus in
reliance upon and in conformity with written information furnished to the
Depositor in writing by any Underwriters expressly for use therein. The only
information furnished by the Underwriters or on behalf of the Underwriter for
use in connection with the preparation of the Registration Statement or the
Prospectus is described in Section 8(e) hereof.
(c) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Securities Act or
the Exchange Act, as applicable, and the Rules and Regulations of the Commission
thereunder, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; and any further
documents so filed and incorporated by reference in the Prospectus, when such
documents become effective or are filed with the Commission, as the case may be,
will conform in all material respects to the requirements of the Securities Act
or the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder and will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading.
(d) Since the respective dates as of which information is given in
the Prospectus, there has not been any material adverse change in the general
affairs, management, financial condition, or results of operations of the
Depositor, otherwise than as set forth or contemplated in the Prospectus as
supplemented or amended as of the Closing Date.
(e) The Depositor has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware, is
duly qualified to do business and is in good standing as a foreign corporation
in each jurisdiction in which its ownership or lease of property or the conduct
of its business requires such qualification, and has all power and authority
necessary to own or hold its properties, to conduct the business in which it is
engaged and to enter into and perform its obligations under the Operative
Agreements to which it is a party and to cause the Certificates to be issued.
(f) There are no actions, proceedings or investigations pending with
respect to which the Depositor has received service of process before, or
threatened by, any court, administrative agency or other tribunal to which the
Depositor is a party or of which any of its properties is the subject (i) which
if determined adversely to the Depositor would have a material adverse effect on
the business or financial condition of the Depositor, (ii) which assert the
invalidity of any of the Operative Agreements to which it is a party or the
Certificates, (iii) which seek to prevent the issuance of the Certificates or
the consummation by the Depositor of any of the transactions contemplated by any
of the Operative Agreements to which it is a party or (iv) which might
materially and adversely affect the performance by the Depositor of its
obligations under, or the validity or enforceability of any of the Operative
Agreements to which it is a party or the Certificates.
(g) This Underwriting Agreement has been, and the Trust Agreement
when executed and delivered as contemplated hereby and thereby, will have been,
duly authorized, executed and delivered by the Depositor, and this Underwriting
Agreement constitutes, and the Trust Agreement when executed and delivered as
contemplated herein, will constitute, legal, valid and binding instruments
enforceable against the Depositor in accordance with their respective terms,
subject as to enforceability to (i) applicable bankruptcy, reorganization,
insolvency, moratorium or other similar laws affecting creditors' rights
generally, (ii) general principles of equity (regardless of whether enforcement
is sought in a proceeding in equity or at law), and (iii) with respect to rights
of indemnity under this Underwriting Agreement and the Trust Agreement,
limitations of public policy under applicable securities laws.
(h) The execution, delivery and performance by the Depositor of the
Operative Agreements to which it is a party and the consummation of the
transactions contemplated hereby and thereby, and the issuance and delivery of
the Certificates do not and will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Depositor is a party, by which the Depositor is bound or
to which any of the properties or assets of the Depositor or any of its
subsidiaries is subject, which breach or violation would have a material adverse
effect on the business, operations or financial condition of the Depositor, nor
will such actions result in any violation of the provisions of the Certificate
of Incorporation or By-Laws of the Depositor or any statute or any order, rule
or regulation of any court or governmental agency or body having jurisdiction
over the Depositor or any of its properties or assets, which breach or violation
would have a material adverse effect on the business, operations or financial
condition of the Depositor.
(i) When the Certificates are duly and validly executed and
authenticated by the Trustee and delivered in accordance with the Trust
Agreement, the Certificates will be duly and validly issued and outstanding and
entitled to the benefits and security afforded by the Trust Agreement.
(j) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body of the United
States is required for the issuance of the Certificates and the sale of the
Certificates to the Underwriters, or the consummation by the Depositor of the
other transactions contemplated by the Operative Agreements, except such
consents, approvals, authorizations, registrations or qualifications as may be
required under state securities or blue sky laws in connection with the purchase
and distribution of the Certificates by the Underwriters or as have been
obtained.
(k) The Depositor possesses all material licenses, certificates,
authorities or permits issued by the appropriate state, federal or foreign
regulatory agencies or bodies necessary to conduct the business now conducted by
it and as described in the Prospectus, and the Depositor has not received notice
of any proceedings relating to the revocation or modification of any such
license, certificate, authority or permit which if decided adversely to the
Depositor would, singly or in the aggregate, materially and adversely affect the
conduct of its business, operations or financial condition.
(l) At the time of execution and delivery of the Trust Agreement,
the Depositor will: (i) be the sole beneficial owner of the Primary Assets being
transferred to the Trustee pursuant thereto, free and clear of any lien,
mortgage, pledge, charge, encumbrance, adverse claim or other security interest
(collectively, "Liens"); (ii) not have assigned to any Person any of its right
or title in the Primary Assets, in the Trust Agreement or in the Certificates
being issued; and (iii) have the power and authority to sell its interest in the
Primary Assets to the Trust and to sell the Certificates to the Underwriters.
Upon execution and delivery of the Trust Agreement by the Trustee, the Trust
will have acquired beneficial ownership of all of the Depositor's right, title
and interest in and to the Primary Assets. Upon delivery to the Underwriters of
the Certificates, the Underwriters will have good title to the Certificates,
free and clear of any Liens.
(m) As of the Closing Date, the Primary Assets included in the
related Trust will meet the eligibility criteria described in the Prospectus and
will conform in all material respects to the descriptions thereof contained in
the Prospectus.
(n) Neither the Depositor nor the Trust created by the Trust
Agreement is an "investment company" within the meaning of such term under the
Investment Company Act of 1940 (the "1940 Act") and the Rules and Regulations of
the Commission thereunder.
(o) At the Closing Date, the Certificates and the Trust Agreement
will conform in all material respects to the descriptions thereof contained in
the Prospectus.
(p) At the Closing Date, the Certificates will have been rated at
least "A+" by Standard & Poor's Ratings Services, a division of The XxXxxx-Xxxx
Companies, Inc. ("S&P" or the "Rating Agency").
(q) Any taxes, fees and other governmental charges in connection
with the execution, delivery and issuance of the Operative Agreements and the
Certificates have been paid or will be paid at or prior to the Closing Date.
(r) At the Closing Date, each of the representations and warranties
of the Depositor set forth in the Trust Agreement will be true and correct in
all material respects.
Any certificate signed by an officer of the Depositor and delivered to the
Underwriters or counsel for the Underwriters in connection with an offering of
the Certificates shall be deemed to be a representation and warranty as to the
matters covered thereby to each person to whom the representations and
warranties in this Section 1 are made.
SECTION 2. Purchase and Sale. The commitment of the Underwriters to
purchase the Certificates pursuant to this Underwriting Agreement shall be
deemed to have been made on the basis of the representations and warranties
herein contained and shall be subject to the terms and conditions herein set
forth. The Depositor agrees to instruct the Trustee to issue the Certificates
and agrees to sell to the Underwriters, and the Underwriters severally agree
(except as provided in Sections 10 and 11) to purchase from the Depositor, the
aggregate number of the Certificates at the purchase price or prices set forth
in Schedule I, except that the amount purchased by each Underwriter may change
in accordance with Section 10 of this Underwriting Agreement.
SECTION 3. Delivery and Payment. Delivery of and payment for the
Certificates to be purchased by the Underwriters shall be made at the offices of
Cadwalader, Xxxxxxxxxx & Xxxx LLP, Xxx Xxxxx Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 or at such other place as shall be agreed upon by the Underwriters
and the Depositor at 10:00 a.m., New York time on September 8, 2006, or at such
other time or date as shall be agreed upon in writing by the Underwriters and
the Depositor (such date being referred to as the "Closing Date"). Payment shall
be made to the Depositor by wire transfer of same day funds payable to the
account of the Depositor. Delivery of the Certificates shall be made to the
Underwriters for the accounts of the Underwriters against payment of the
purchase price thereof. The Certificates shall be in such authorized
denominations and registered in such names as the Underwriters may request in
writing at least two business days prior to the Closing Date. The Certificates
will be made available for examination by the Underwriters no later than 2:00
p.m. New York City time on the first business day prior to the Closing Date.
SECTION 4. Offering by the Underwriters. It is understood that, subject to
the terms and conditions hereof, the Underwriters proposes to offer the
Certificates for sale to the public as set forth in the Prospectus.
SECTION 5. Covenants of the Depositor. The Depositor agrees as follows:
(a) To prepare the Prospectus in a form approved by the Underwriters
and to file such Prospectus pursuant to Rule 424(b) under the Securities Act not
later than the Commission's close of business on the second business day
following the availability of the Prospectus to the Underwriters and to make no
further amendment or any supplement to the Registration Statement or to the
Prospectus prior to the Closing Date except as permitted herein; to advise the
Underwriters, promptly after it receives notice thereof, of the time when any
amendment to the Registration Statement has been filed or becomes effective
prior to the Closing Date or any supplement to the Prospectus or any amended
Prospectus has been filed prior to the Closing Date and to furnish the
Underwriters with copies thereof; to file promptly all reports and any
definitive proxy or information statements required to be filed by the Depositor
with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of the Prospectus and, for so long as the
delivery of a prospectus is required in connection with the offering or sale of
the Certificates to advise the Underwriters promptly of its receipt of notice of
the issuance by the Commission of any stop order or of: (i) any order preventing
or suspending the use of the Prospectus; (ii) the suspension of the
qualification of the Certificates for offering or sale in any jurisdiction;
(iii) the initiation of or threat of any proceeding for any such purpose; (iv)
any request by the Commission for the amending or supplementing of the
Registration Statement or the Prospectus or for additional information. In the
event of the issuance of any stop order or of any order preventing or suspending
the use of the Prospectus or suspending any such qualification, the Depositor
promptly shall use its best efforts to obtain the withdrawal of such order by
the Commission.
(b) To furnish promptly to the Underwriters and to counsel for the
Underwriters a signed copy of the Registration Statement as originally filed
with the Commission, and of each amendment thereto filed with the Commission,
including all consents and exhibits filed therewith.
(c) To deliver promptly to the Underwriters such number of the
following documents as the Underwriters shall reasonably request: (i) conformed
copies of the Registration Statement as originally filed with the Commission and
each amendment thereto (in each case including exhibits); (ii) the Prospectus
and any amended or supplemented Prospectus; and (iii) any document incorporated
by reference in the Prospectus (including exhibits thereto). If the delivery of
a prospectus is required at any time in connection with the offering or sale of
the Certificates, and if at such time any events shall have occurred as a result
of which the Prospectus as then amended or supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in light of the circumstances under which
they were made when such Prospectus is delivered, not misleading, or, if for any
other reason it shall be necessary during the same period to amend or supplement
the Prospectus or to file under the Exchange Act any document incorporated by
reference in the Prospectus in order to comply with the Securities Act or the
Exchange Act, the Depositor shall notify the Underwriter and, upon the
Underwriter's request, shall file such document and prepare and furnish without
charge to the Underwriters and to any dealer in securities as many copies as the
Underwriters may from time to time reasonably request of an amended Prospectus
or a supplement to the Prospectus which corrects such statement or omission or
effects such compliance.
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the Prospectus
that may, in the judgment of the Depositor or the Underwriter, be required by
the Securities Act or requested by the Commission.
(e) To furnish the Underwriters and counsel for the Underwriters,
prior to filing with the Commission, and to obtain the consent of the
Underwriters for the filing of the following documents relating to the
Certificates: any (i) amendment to the Registration Statement or supplement to
the Prospectus, or document incorporated by reference in the Prospectus, or (ii)
Prospectus pursuant to Rule 424 of the Rules and Regulations.
(f) To make generally available to holders of the Certificates as
soon as practicable, but in any event not later than ninety (90) days after the
close of the period covered thereby, a statement of earnings of the Trust (which
need not be audited) complying with Section 11(a) of the Securities Act and the
Rules and Regulations (including, at the option of the Depositor, Rule 158) and
covering a period of at least twelve (12) consecutive months beginning not later
than the first day of the first fiscal quarter following the Closing Date.
(g) To use its best efforts, in cooperation with the Underwriters,
to qualify the Certificates for offering and sale under the applicable
securities laws of such states and other jurisdictions of the United States or
elsewhere as the Underwriters may designate, and maintain or cause to be
maintained such qualifications in effect for as long as may be required for the
distribution of the Certificates; provided, however, that in connection
therewith, the Depositor shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction. The Depositor will file or cause the filing of such statements and
reports as may be required by the laws of each jurisdiction in which the
Certificates have been so qualified.
(h) To file or cause the Trustee to file on behalf of the Trust, on
a timely basis, any documents and any amendments thereof as may be required to
be filed by it pursuant to the Exchange Act.
(i) So long as the Certificates shall be outstanding the Depositor
shall cause the Trustee, pursuant to the Trust Agreement, to deliver to the
Underwriters as soon as such information, documents and reports, as applicable,
are available to be furnished: (i) copies of all reports filed with the
Commission and copies of each notice published or mailed to any holders of
Certificates pursuant to the Trust Agreement, and (ii) such other information
with respect to the Trust or its financial condition or results of operations,
as the Underwriters may reasonably request, including, but not limited to,
information necessary or appropriate to the maintenance of a secondary market in
any Certificates.
(j) To apply the net proceeds from the sale of the Certificates in
the manner set forth in the Prospectus Supplement.
SECTION 6. Conditions to the Underwriters' Obligations. The obligations of
each of the Underwriter to purchase the Certificates pursuant to this
Underwriting Agreement are subject to: (i) the accuracy on and as of the Closing
Date of the representations and warranties on the part of the Depositor herein
contained; (ii) the performance by the Depositor of all of its obligations
hereunder; and (iii) the following conditions as of the Closing Date:
(a) The Underwriters shall have received confirmation of the
effectiveness of the Registration Statement. No stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission. Any request of the Commission for inclusion of
additional information in the Registration Statement or the Prospectus shall
have been complied with.
(b) Neither Underwriter shall have discovered and disclosed to the
Depositor on or prior to the Closing Date that the Registration Statement or the
Prospectus or any amendment or supplement thereto contains an untrue statement
of a fact or omits to state a fact which, in the opinion of such Underwriter and
its counsel, is material and is required to be stated therein or is necessary to
make the statements therein not misleading.
(c) All corporate proceedings and other legal matters relating to
the authorization, form and validity of the Operative Agreements, the
Certificates, the Registration Statement and the Prospectus, and all other legal
matters relating to this Underwriting Agreement and the transactions
contemplated hereby shall be satisfactory in all respects to the Underwriters
and their counsel, and the Depositor shall have furnished to the Underwriter and
its counsel all documents and information that they may reasonably request to
enable them to pass upon such matters.
(d) Cadwalader, Xxxxxxxxxx & Xxxx LLP, counsel to the Depositor,
shall have furnished to the Underwriters its written opinion, addressed to the
Underwriters and dated the Closing Date, in form and substance satisfactory to
the Underwriters.
(e) Xxxxxxxx Xxxx, LLP, counsel to the Trustee, shall have furnished
to the Underwriters its written opinion, addressed to the Underwriters and dated
as of the applicable Closing Date, in form and substance satisfactory to the
Underwriters.
(f) If applicable, the Underwriters shall have received letters
dated the Closing Date from counsel rendering opinions to the Rating Agency
rating the Certificates, to the effect that the Underwriters may rely upon their
opinion to such Rating Agency, as if such opinion were rendered to the
Underwriters.
(g) The Underwriters shall have received such opinion or opinions,
dated the Closing Date, with respect to the incorporation of the Depositor, the
validity of the Registration Statement, the Prospectus and other related matters
as the Underwriters may require, and the Depositor shall have furnished to such
counsel such documents as they request for the purpose of enabling them to pass
upon such matters.
(h) The Underwriters shall have received a certificate or
certificates signed by such of the principal executive, financial and accounting
officers of the Depositor as the Underwriters may request, dated the applicable
Closing Date, in which such officers, to the best of their knowledge after
reasonable investigation, shall state that (i) the representations and
warranties of the Depositor in this Agreement are true and correct; (ii) the
Depositor has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied at or prior to the Closing Date; (iii) no stop
order suspending the effectiveness of the Registration Statement has been issued
and no proceedings for that purpose have been instituted or are contemplated;
(iv) subsequent to the respective dates as of which information is given in the
Prospectus, and except as set forth or contemplated in the Prospectus, there has
not been any material adverse change in the general affairs, capitalization,
financial condition or results of operations of the Depositor; (v) except as
otherwise stated in the Prospectus, there are no material actions, suits or
proceedings pending before any court or governmental agency, authority or body
or, to their knowledge, threatened, which could have a material effect upon the
Depositor or upon the transactions contemplated by this Agreement; and (vi)
attached thereto are true and correct copies of a letter from the rating agency
or agencies rating the Certificates subject to this Agreement confirming that,
unless otherwise specified in the applicable Underwriting Agreement that the
Certificates have been rated in the same rating categories established by such
agency or agencies as the rating of the Underlying Securities and that such
rating has not been lowered since the date of such letter.
(i) The Trustee shall have furnished to the Underwriters a
certificate of the Trustee, signed by one or more duly authorized officers of
the Trustee, dated the Closing Date, as to the due authorization, execution and
delivery of the Trust Agreement by the Trustee and the due execution,
authentication and delivery of the Certificates by the Trustee thereunder.
(j) The Depositor shall have furnished to the Underwriters such
further information, certificates and documents as the Underwriter may
reasonably have requested not less than three full business days prior to the
Closing Date.
(k) Subsequent to the execution and delivery of this Underwriting
Agreement, none of the following shall have occurred: (i) trading in securities
generally on the New York Stock Exchange, the American Stock Exchange or the
over-the-counter market shall have been suspended or minimum prices shall have
been established on either of such exchanges or such market by the Commission,
by such exchange or by any other regulatory body or governmental authority
having jurisdiction; (ii) a banking moratorium shall have been declared by
federal or state authorities; (iii) the United States shall have become engaged
in hostilities, there shall have been an escalation of hostilities involving the
United States or there shall have been a declaration of a national emergency or
war by the United States; or (iv) there shall have occurred such a material
adverse change in general economic, political or financial conditions (or the
effect of international conditions on the financial markets of the United States
shall be such) as to make it in each of the instances set forth in clauses (i),
(ii), (iii) and (iv) herein, in the judgment of the Underwriters, impractical or
inadvisable to proceed with the public offering or delivery of the Certificates
on the terms and in the manner contemplated in the Prospectus.
If any condition specified in this Section 6 shall not have been fulfilled
when and as required to be fulfilled, this Underwriting Agreement may be
terminated by the Underwriters by notice to the Depositor at any time at or
prior to the Closing Date, and such termination shall be without liability of
any party to any other party except as provided in Section 7.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Underwriting Agreement shall be deemed to be in compliance
with the provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Underwriters.
SECTION 7. Payment of Expenses. As between the Depositor and the
Underwriters, the Depositor agrees to pay all expenses incident to the
performance of its obligations under this Agreement, including without
limitation those relating to: (a) the costs incident to the authorization,
issuance, sale and delivery of the Certificates and any taxes payable in
connection therewith; (b) a portion of the fees previously paid to the
Commission with respect to the filing under the Securities Act of the
Registration Statement and any amendments and exhibits thereto; (c) the costs of
distributing the Registration Statement as originally filed and each amendment
thereto and any post-effective amendments thereof (including, in each case,
exhibits), the Prospectus and any amendment or supplement to the Prospectus
(including the Prospectus Supplement) or any document incorporated by reference
therein, all as provided in this Underwriting Agreement; (d) the costs of
reproducing and distributing this Underwriting Agreement; (e) the fees and
expenses of qualifying the Certificates under the securities laws of the several
jurisdictions as provided in Section 5(h), if necessary, hereof and of
preparing, printing and distributing a Blue Sky Memorandum and a Legal
Investment Survey (including related fees and expenses of counsel to the
Underwriters); (f) any fees charged by securities rating services for rating the
Certificates; and (g) all other costs and expenses incident to the performance
of the obligations of the Depositor (including costs and expenses of your
counsel).
If this Underwriting Agreement is terminated by the Underwriters in
accordance with the provisions of Section 6 or Section 11, the Depositor shall
cause the Underwriters to be reimbursed for all reasonable out-of-pocket
expenses, including fees and disbursements of Sidley Austin LLP, counsel for the
Underwriters.
SECTION 8. Indemnification and Contribution. (a) The Depositor agrees to
indemnify and hold harmless each of the Underwriters and each person, if any,
who controls any Underwriter within the meaning of Section 15 of the Securities
Act from and against any and all loss, claim, damage or liability, joint or
several, or any action in respect thereof (including, but not limited to, any
loss, claim, damage, liability or action relating to purchases and sales of the
Certificates), to which such Underwriter or any such controlling person may
become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, or any amendment thereof or supplement thereto, (ii) the
omission or alleged omission to state in the Registration Statement or any
amendment thereof or supplement thereto a material fact required to be stated
therein or necessary to make the statements therein not misleading, (iii) any
untrue statement or alleged untrue statement of a material fact contained in the
Prospectus, or any amendment thereof or supplement thereto, or (iv) the omission
or alleged omission to state in the Prospectus or any amendment thereof or
supplement thereto a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, and shall reimburse such Underwriter and each such
controlling person promptly upon demand for any legal or other expenses
reasonably incurred by such Underwriter or such controlling person in connection
with investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred; provided,
however, that the Depositor shall not be liable in any such case to the extent
that any such loss, claim, damage, liability or action arises out of, or is
based upon, any untrue statement or alleged untrue statement or omission or
alleged omission made in the Prospectus, or any amendment thereof or supplement
thereto, or the Registration Statement, or any amendment thereof or supplement
thereto, in reliance upon and in conformity with written information furnished
to the Depositor by or on behalf of such Underwriter specifically for inclusion
therein, it being understood that the only information furnished by such
Underwriter or on behalf of any such Underwriter for use in connection with the
preparation of the Registration Statement or the Prospectus is described in
Section 8(e) hereof. The foregoing indemnity agreement is in addition to any
liability which the Depositor may otherwise have to each Underwriter or any
controlling person of each Underwriter.
(b) Each Underwriter, agrees to indemnify and hold harmless the
Depositor, each of their directors, each of the officers of the Depositor who
signed the Registration Statement, and each person, if any, who controls the
Depositor within the meaning of Section 15 of the Securities Act against any and
all loss, claim, damage or liability, or any action in respect thereof, to which
the Depositor or any such director, officer or controlling person may become
subject, under the Securities Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon, (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, or any amendment thereof or supplement thereto, (ii) the
omission or alleged omission to state in the Registration Statement or any
amendment thereof or supplement thereto a material fact required to be stated
therein or necessary to make the statements therein not misleading, (iii) any
untrue statement or alleged untrue statement of a material fact contained in the
Prospectus, or any amendment thereof or supplement thereto, or (iv) the omission
or alleged omission to state in the Prospectus, or any amendment thereof or
supplement thereto a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information furnished to the
Depositor by or on behalf of the Underwriter specifically for inclusion therein,
and shall reimburse the Depositor and any such director, officer or controlling
person for any legal or other expenses reasonably incurred by the Depositor or
any director, officer or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred. The only information furnished by the
Underwriters or on behalf of the Underwriter for use in connection with the
preparation of the Registration Statement or the Prospectus is described in
Section 8(e) hereof. The foregoing indemnity agreement is in addition to any
liability which the Underwriters may otherwise have to the Depositor or any such
director, officer or controlling person.
(c) Promptly after receipt by any indemnified party under this
Section 8 of notice of any claim or the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against any
indemnifying party under this Section 8, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section 8 except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify any indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under this Section 8.
If any such claim or action shall be brought against an indemnified party,
and it shall notify the indemnifying party thereof, the indemnifying party shall
be entitled to participate therein and, to the extent that it wishes, jointly
with any other similarly notified indemnifying party, to assume the defense
thereof with counsel reasonably satisfactory to the indemnified party. After
notice from the indemnifying party to the indemnified party of its election to
assume the defense of such claim or action, except to the extent provided in the
next following paragraph, the indemnifying party shall not be liable to the
indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation.
Any indemnified party shall have the right to employ separate counsel in
any such action and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless: (i) the employment thereof has been specifically authorized by the
indemnifying party in writing; (ii) such indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party and in the reasonable judgment of such counsel it is
advisable for such indemnified party to employ separate counsel; or (iii) the
indemnifying party has failed to assume the defense of such action and employ
counsel reasonably satisfactory to the indemnified party, in which case, if such
indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such indemnified party, it being understood, however, the
indemnifying party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (in
addition to one local counsel per jurisdiction) at any time for all such
indemnified parties, which firm shall be designated in writing by the applicable
Underwriter, if the indemnified parties under this Section 8 consist of the
Underwriters or any of its respective controlling persons, or the Depositor, if
the indemnified parties under this Section 8 consist of the Depositor or any of
the Depositor's directors, officers or controlling persons.
Each indemnified party, as a condition of the indemnity agreements
contained in Sections 8(a) and (b), shall use its best efforts to cooperate with
the indemnifying party in the defense of any such action or claim. No
indemnifying party shall be liable for any settlement of any such action
effected without its written consent (which consent shall not be unreasonably
withheld), but if settled with its written consent or if there be a final
judgment for the plaintiff in any such action, the indemnifying party agrees to
indemnify and hold harmless any indemnified party from and against any loss or
liability by reason of such settlement or judgment.
Notwithstanding the foregoing paragraph, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the indemnified
party for fees and expenses of counsel, the indemnifying party agrees that it
shall be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than thirty (30)
days after receipt by such indemnifying party of the aforesaid request and (ii)
such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement.
(d) If the indemnification provided for in this Section 8 shall for
any reason be unavailable to or insufficient to hold harmless an indemnified
party under Sections 8(a) or (b) in respect of any loss, claim, damage or
liability, or any action in respect thereof, referred to therein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Depositor and the related Underwriter from the offering of the
Certificates or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law or if the indemnified party failed to give the
notice required under Section 8(c), in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Depositor and the related Underwriter with respect to
the statements or omissions which resulted in such loss, claim, damage or
liability, or action in respect thereof, as well as any other relevant equitable
considerations.
The relative benefits of the related Underwriter and the Depositor shall
be deemed to be in such proportion as the total net proceeds from the offering
(before deducting expenses) received by the Depositor bear to the total
underwriting discounts and commissions received by the related Underwriter from
time to time in negotiated sales of the related Certificates.
The relative fault of the related Underwriter and the Depositor shall be
determined by reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Depositor or by the related Underwriter, the
intent of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission and other equitable
considerations.
The Depositor and each of the Underwriters agree that it would not be just
and equitable if contributions pursuant to this Section 8(d) were to be
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purposes) or by any other method of allocation which does not
take into account the equitable considerations referred to herein. The amount
paid or payable by an indemnified party as a result of the loss, claim, damage
or liability, or action in respect thereof, referred to above in this Section
8(d) shall be deemed to include, for purposes of this Section 8(d), any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim.
For purposes of this Section 8, in no case shall any Underwriters be
responsible for any amount in excess of (x) the amount received by such
Underwriter in connection with its resale of the related Certificates over (y)
the amount paid by such Underwriter to the Depositor for the related
Certificates by such Underwriter hereunder. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(e) Each of the Underwriters confirms that the information set forth in the
Prospectus Supplement under the heading "Method of Distribution" (as such
information relates to the Underwriter) is correct, and the parties hereto
acknowledge that such information constitutes the only information furnished in
writing by or on behalf of such Underwriter for use in connection with the
preparation of the Registration Statement or the Prospectus.
SECTION 9. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Underwriting
Agreement or contained in certificates of officers of the Depositor submitted
pursuant hereto shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of the Underwriters or controlling
persons thereof, or by or on behalf of the Depositor, and shall survive delivery
of any Certificates to the Underwriters.
SECTION 10. Default by One of the Underwriters. If one of the Underwriters
participating in the public offering of the Certificates shall fail at the
Closing Date to purchase the Certificates which it is obligated to purchase
hereunder (the "Defaulted Certificates"), then one or more of the non-defaulting
Underwriters shall have the right, within 24 hours thereafter, to purchase all,
but not less than all, of the Defaulted Certificates in such amounts as may be
agreed upon and upon the terms herein set forth. If, however, the non-defaulting
Underwriters have not completed such arrangements within such 24-hour period,
then:
(a) if the aggregate principal amount of Defaulted Certificates does
not exceed 10% of the aggregate principal amount of the Certificates to be
purchased pursuant to this Underwriting Agreement, the non-defaulting
Underwriters shall be obligated to purchase the full amount thereof, or
(b) if the aggregate principal amount of Defaulted Certificates
exceeds 10% of the aggregate principal amount of the Certificates to be
purchased pursuant to this Underwriting Agreement, this Underwriting Agreement
shall terminate, without any liability on the part of the non-defaulting
Underwriters.
No action taken pursuant to this Section 10 shall relieve a defaulting
Underwriter from the liability with respect to any default of such Underwriter
under this Underwriting Agreement.
In the event of a default by any Underwriter as set forth in this Section
10, the non-defaulting Underwriters and the Depositor shall have the right to
postpone the Closing Date for a period not exceeding five Business Days in order
that any required changes in the Registration Statement or Prospectus or in any
other documents or arrangements may be effected.
SECTION 11. Termination of this Underwriting Agreement. The Underwriters
may terminate this Underwriting Agreement immediately upon notice to the
Depositor, at any time at or prior to the Closing Date if any of the events or
conditions described in Section 6(k) of this Underwriting Agreement shall occur
and be continuing. In the event of any such termination, the covenant set forth
in Section 5(d), the provisions of Section 7, the indemnity agreement set forth
in Section 8, and the provisions of Sections 9 and 16 shall remain in effect.
SECTION 12. Non-petition Covenant. Notwithstanding any prior termination
of this Agreement, each of the Underwriters and the Depositor agree that it
shall not, until the date which is one year and one day after the earlier of a
Trust Termination Event or the Final Scheduled Distribution Date, acquiesce,
petition or otherwise invoke or cause the Trust to invoke the process of the
United States of America, any State or other political subdivision thereof or
any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government for the purpose of
commencing or sustaining a case by or against the Trust under a federal or state
bankruptcy, insolvency or similar law or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of the
Trust or all or any part of the property or assets of the Trust or ordering the
winding up or liquidation of the affairs of the Trust.
SECTION 13. Notices. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail,
telex or facsimile transmission to care of Wachovia Capital Markets, LLC, One
Wachovia Center, 000 X. Xxxxxxx Xx., Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000,
Attention: STRATS 2006-4 (Fax: (000) 000-0000) and
(b) if to the Depositor, shall be delivered or sent by mail, telex
or facsimile transmission to care of Synthetic Fixed-Income Securities, Inc.,
One Wachovia Center, 000 X. Xxxxxxx Xx., Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000,
Attention: STRATS 2006-4 (fax: (000) 000-0000).
SECTION 14. Persons Entitled to the Benefit of this Underwriting
Agreement. This Underwriting Agreement shall inure to the benefit of and be
binding upon the Underwriters and the Depositor and their respective successors.
This Underwriting Agreement and the terms and provisions hereof are for the sole
benefit of only those persons, except that the representations, warranties,
indemnities and agreements contained in this Underwriting Agreement shall also
be deemed to be for the benefit of the person or persons, if any, who control
the Underwriters within the meaning of Section 15 of the Securities Act, and for
the benefit of directors of the Depositor, officers of the Depositor who have
signed the Registration Statement and any person controlling the Depositor
within the meaning of Section 15 of the Securities Act. Nothing in this
Underwriting Agreement is intended or shall be construed to give any person,
other than the persons referred to in this Section 13, any legal or equitable
right, remedy or claim under or in respect of this Underwriting Agreement or any
provision contained herein.
SECTION 15. Survival. The respective indemnities, representations,
warranties and agreements of the Depositor and the Underwriters contained in
this Underwriting Agreement, or made by or on behalf of them, respectively,
pursuant to this Underwriting Agreement shall survive the delivery of and
payment for the Certificates and shall remain in full force and effect,
regardless of any investigation made by or on behalf of any of them or any
person controlling any of them.
SECTION 16. Definition of the Term "Business Day". For purposes of this
Underwriting Agreement, "Business Day" means any day on which the New York Stock
Exchange is open for trading.
SECTION 17. Governing Law; Submission to Jurisdiction. This Underwriting
Agreement shall be governed by and construed in accordance with the laws of the
State of New York without giving effect to the conflict of law rules thereof.
The parties hereto hereby submit to the jurisdiction of the United States
District Court for the Southern District of New York and any court in the State
of New York located in the City and County of New York, and appellate court from
any thereof, in any action, suit or proceeding brought against it or in
connection with this Underwriting Agreement or any of the related documents or
the transactions contemplated hereunder or for recognition or enforcement of any
judgment, and the parties hereto hereby agree that all claims in respect of any
such action or proceeding may be heard or determined in New York State court or,
to the extent permitted by law, in such federal court.
SECTION 18. Counterparts. This Underwriting Agreement may be executed in
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
SECTION 19. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Underwriting Agreement.
* * *
Very truly yours,
SYNTHETIC FIXED-INCOME SECURITIES, INC.
By: /s/ Xxxxx Xxxxx
-----------------------------------------
Name: Xxxxx Xxxxx
Title: Managing Director
Agreed and Accepted:
WACHOVIA CAPITAL MARKETS, LLC,
for itself and as Representative of the
underwriters named in Schedule I hereto
By: /s/ Xxxxx Xxxxx
-----------------------------------------
Name: Xxxxx Xxxxx
Title: Managing Director
SCHEDULE I
Certificates
-----------------------------------
Number of
Underwriter Certificates Purchase Price
------------------------------------------- ----------------- -----------------
Wachovia Capital Markets, LLC 720,000 $18,000,000
RBC Xxxx Xxxxxxxx Inc 600,000 $15,000,000
