EXECUTION COPY

 

Exhibit 10.3

 

PLEDGE AND INTERCREDITOR AGREEMENT

 

THIS PLEDGE AND INTERCREDITOR AGREEMENT (as amended, supplemented, or otherwise
modified from time to time, this “Agreement”), dated as of November 13, 2008, is
entered into between Dexia Crédit Local (“DCL”), Dexia Bank Belgium S.A.
(“DBB”), Financial Security Assurance Inc. (“FSA”) and FSA Asset Management, LLC
(“FSAM”).

 

W I T N E S S E T H:

 

WHEREAS, pursuant to the Amended and Restated Insurance and Indemnity Agreement
dated as of October 21, 2008 between FSA and FSAM (the “FSAM Insurance
Agreement”), a copy of which is attached hereto as Annex A, FSAM has granted FSA
a security interest in the collateral identified therein (as defined in the FSAM
Insurance Agreement the “Collateral”);

 

WHEREAS, pursuant to a Revolving Credit Agreement dated June 30, 2008 between
FSAM and DCL, as amended by the letter of assignment dated as of August 13, 2008
between DBB and DCL (the “Credit Agreement”), DBB and DCL (together the
“Lenders”) will provide financing to FSAM in the form of advances requested by
FSAM from time to time;

 

WHEREAS, the Lenders wish to obtain and FSAM wishes to grant a security interest
over the Collateral identified in the FSAM Insurance Agreement and FSA wishes to
consent to the foregoing grant of security;

 

WHEREAS, the Lenders and FSA wish to set forth the priorities of their
respective liens in the Collateral and the circumstances that will determine
such relative priority;

 

WHEREAS DCL and DBB have agreed that DCL will act as Security Agent on behalf of
itself and DBB under this Agreement;

 

NOW THEREFORE, for good and valuable consideration the receipt of which is
hereby acknowledged, DBB, DCL, FSA and FSAM each agree as follows:

 

ARTICLE I
DEFINITIONS

 

SECTION 1.1.                                               Certain Terms. 
Capitalized terms used but not defined herein have the meanings set forth in the
Credit Agreement or, if not defined therein, in the FSAM Insurance Agreement. 
The following terms (whether or not underscored) when used in this Agreement,
including its preamble and recitals, shall have the following meanings (such
definitions to be equally applicable to the singular and plural forms thereof):

 

“Account Bank Lien” means any Lien for the benefit of the Account Bank, as
securities intermediary (as defined in the UCC), as required or permitted under
the UCC or under the Securities Account Control Agreement.

 

“Collateral Posting Lien” means, in the event that the Master Agreements are
recharacterized as secured financings, the Lien for the benefit of FSA Capital
Management and/or FSA Capital Markets pursuant to a pledge or advance of
Collateral by FSAM for the

 

 

purpose of enabling FSA Capital Management and FSA Capital Markets to satisfy
their respective Collateral Posting Requirements.

 

“Collateral Posting Requirements” means any requirement for FSA Capital
Management or FSA Capital Markets to post specified collateral either
(i) pursuant to the terms of the relevant GIC irrespective of the rating of the
financial strength of FSA or (ii) during such time as the financial strength of
FSA is not rated at least the required rating specified under the relevant GIC. 
For the avoidance of doubt, a “requirement” to post collateral includes a
provision in a GIC that upon a relevant downgrade of FSA, the GIC issuers have
the option to post collateral (or effect one or more other cures), failing which
the GIC would become subject to termination (either automatically or at the then
election of the relevant GIC holder).

 

“Creditor Parties” means the Lenders and FSA.

 

“Excluded Collateral” means any (i) Collateral specifically granted or sold by
FSAM, in each case subject to the consent of FSA, to secure its payment
obligations under (A) any Master Agreement, Related Derivative Agreement or
other similar financing arrangements or posted by FSAM as collateral to satisfy
margin requirements with one or more brokers or dealers, (B) any repurchase
agreement between FSAM and DCL, DBB, FSA or FSA Insurance Company, (C) any
securities lending agreement between FSAM and DCL, DBB, FSA or FSA Insurance
Company, or (D) any repurchase agreement between FSAM and any third party, where
(I) the right to act as purchaser under such repurchase agreement has first been
offered to DCL or DBB in the same amount and on substantially the same terms as
those subsequently agreed by FSAM with the relevant purchaser, pursuant to the
Offer Procedures, and (II) DCL or DBB, as applicable, has not accepted such
offer to enter into such repurchase agreement with FSAM on such terms in
accordance with the Offer Procedures and (ii) any other Collateral consented to
by the Lenders (such consent by the Lenders not to be unreasonably withheld). 
For the avoidance of doubt, Excluded Collateral does not include, and the
security interest of the Lenders hereunder shall extend to, all rights of FSAM
to repurchase or to receive the return of Collateral (or equivalent securities
or payments) under the Master Agreements or any Related Derivative Agreement or
other similar financing arrangements pursuant to which Collateral may become
Excluded Collateral.

 

 “FSA Capital Management” means FSA Capital Management Services LLC.

 

“FSA Capital Management Insurance Agreement” means the Insurance and Indemnity
Agreement dated as of October 29, 2001 between FSA and FSA Capital Management.

 

“FSA Capital Markets” means FSA Capital Markets Services LLC.

 

“FSA Capital Markets Insurance Agreement” means the Insurance and Indemnity
Agreement dated as of October 29, 2001 between FSA and FSA Capital Markets.

 

“FSA Liens” means the security interest(s) in favor of FSA in relation to any or
all of the Collateral under the FSAM Insurance Agreement, FSA Capital Management
Insurance Agreement or the FSA Capital Markets Insurance Agreement.

 

“Grant” means, as to any asset or property, to mortgage, pledge, assign and
grant a security interest in such asset or property. A Grant of the Collateral
or any assigned document, instrument or agreement shall include all rights,
powers and options (but none of the obligations, except to the extent required
by law), of the Granting party thereunder or with respect thereto, including the
immediate and continuing right to claim, collect, receive and give receipt for
all

 

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moneys payable thereunder and all income, proceeds, products, rents and profits
thereof, to give and receive notices and other communications, to make waivers
or other agreements, to exercise all rights and options, to bring proceedings in
the name of the Granting party or otherwise, and generally to do and receive
anything which the Granting party is or may be entitled to do or receive
thereunder or with respect thereto.

 

“Intended Uses” means FSAM’s application of funds to (i) make payments in
respect of the Master Notes or Master Agreements, (ii) make payments in respect
of Related Derivatives and any other hedging transactions (such as futures
transactions) entered into by FSAM to hedge exposures relating to the Assets,
the Master Notes and the Master Agreements, (iii) make advances to FSA Capital
Management and FSA Capital Markets for the purpose of enabling FSA Capital
Management and FSA Capital Markets to satisfy their respective Collateral
Posting Requirements under the guaranteed investment contracts (“GICs”) issued
by FSA Capital Management and FSA Capital Markets, (iv) make reimbursement
payments to FSA in respect of any payments by FSA under the Master Note
Policies, the Master Agreement Policies, the Derivative Policies and the Asset
Policies, (v) make payments in respect of financing obtained under the Master
Agreements for the purpose of meeting Collateral Posting Requirements or
otherwise for the payments described in (i) through (iv), (vi) make payment of
other sums payable by the Issuer under the foregoing documents and any of the
other “Issuer Documents” as defined in the FSAM Insurance Agreement, in
connection with the transactions contemplated thereby, (vii) make payments under
agreements or transactions ancillary or incidental to the items described in
(i) through (vi), (viii) make payments of fees, charges, costs and expenses in
respect of banking, custodial and other services to FSAM incurred in connection
with the transactions contemplated by the agreements in (i) through (vii) and
(ix) make transfers of securities under FSAM’s other repurchase agreements or
securities lending agreements.

 

“Lender Agreements” means the Credit Agreement, the Note(s) issued thereunder
and this Agreement.

 

“Lender Obligations” means all payment obligations of FSAM under the Lender
Agreements.

 

“Lien” means, with respect to any property, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind in respect of such property.

 

 “Master Agreements” means the Master Repurchase Agreement I dated as of
October 29, 2001 between FSAM and FSA Capital Management and the Master
Repurchase Agreement II dated as of October 29, 2001 between FSAM and FSA
Capital Markets.

 

“Master Notes” means the Master Note, Series A dated October 29, 2001 issued by
FSAM to FSA Capital Management and the Master Note, Series B dated October 29,
2001 issued by FSAM to FSA Capital Markets.

 

“Offer Procedures” means the following procedures for giving DBB or DCL a right
to match the terms of any additional repurchase agreement financing obtained by
FSAM:  (1) if FSAM intends to solicit one or more quotations for repurchase
agreement financing, FSAM shall give notice (which may be oral notice) of such
intention to DBB or DCL, with FSAM giving as much advance notice of its
solicitation of quotations as is reasonably practicable and in any event
contacting DBB or DCL substantially at the same time as FSAM contacts other
potential providers of financing, with such notice to (x) be given at such
notice details as DBB and DCL,

 

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as applicable, shall specify from time to time to FSAM for this purpose and
(y) describe the expected purchased securities, purchase date, repurchase date,
purchase price, and approximate time at which FSAM intends to obtain quotations;
(2) at the time at which one or more quotations are obtained, FSAM shall contact
DBB or DCL by telephone, at the contact number(s) of such individuals at DBB or
DCL, as applicable, as DBB or DCL shall specify from time to time to FSAM for
such purpose (it being understood that FSAM shall not be responsible if the
relevant persons are unavailable at such number(s)), of the terms (including the
final purchased securities, purchase date, repurchase date, purchase price,
pricing rate, and margin percentage) of the proposed repurchase agreement for
which FSAM has obtained one or more quotations from a third party; and (3) DBB
or DCL, as applicable, shall have 15 minutes from receipt of such notice of such
terms in which to accept an offer (which may be by telephone) to act as
purchaser under such a repurchase agreement with FSAM.  The Offer Procedures
will be satisfied in relation to DBB only if all relevant notices given to DBB
are given during business hours in Brussels.  In the case of notices given to
DCL, the Offer Procedures may be satisfied by notices given to personnel of
DCL’s New York Branch during business hours in New York; provided that if DCL
ceases to conduct U.S. dollar repurchase agreement financing activity in New
York, FSAM and DCL shall cooperate in good faith to specify an alternative set
of procedures for giving DCL a commercially reasonable notice and opportunity to
exercise its option to provide repurchase agreement financing arranged by FSAM
from time to time.  For the avoidance of doubt, the Offer Procedures are
required to be satisfied with respect to any proposed repurchase agreement only
in relation to either DBB or DCL, not both DBB and DCL.

 

“Permitted Lien” means (i) any Collateral Posting Lien and (ii) any Account Bank
Lien.

 

“Person” Any individual, corporation, partnership, joint venture, association,
company, trust, unincorporated organization or government or any agency or
political subdivision thereof.

 

“Security Agent” means the DCL acting as agent for itself and DBB for purposes
of the Lender Agreements.

 

“Senior Secured Obligations” means all payment obligations of FSAM under the
FSAM Insurance Agreement.

 

“Subordinated Liens” means the Lenders’ Liens.

 

“UCC” or “Uniform Commercial Code” means the Uniform Commercial Code as in
effect from time to time in the State of New York and, with respect to security
interests perfected through the possession of the Security Agent, the Uniform
Commercial Code as in effect from time to time in the State of Pennsylvania. 
Unless otherwise stated, all references herein to statutory sections or articles
are to sections and articles of the UCC.

 

ARTICLE II

SECURITY INTEREST PROVISIONS

 

SECTION 2.1.                                               Lenders’ Liens

 

In order to secure, as provided herein, the performance and observance of each
term, covenant, agreement and condition of FSAM contained in the Credit
Agreement or the Notes issued thereunder (whether in respect of existing or
future advances under the Credit

 

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Agreement) FSAM hereby Grants a security interest in and collaterally assigns,
transfers, sets over, pledges and conveys to the Security Agent, on behalf of
and for the benefit of each Lender, all the right, title, interest and estate of
FSAM, whether now or hereafter acquired, in, to and under the Collateral as
defined in the FSAM Insurance Agreement; provided, however, that the Collateral
shall not include any Excluded Collateral (the “Lenders’ Liens”).

 

SECTION 2.2.                                               Notices.

 

In the event that DBB or DCL shall give notice of an Event of Default under the
Credit Agreement or notify FSAM of the termination of the commitment of the
Lenders and acceleration of the amounts owed under Credit Agreement pursuant to
Section 5.01(b) of the Credit Agreement, the Security Agent shall promptly give
a copy of such notice to FSA.

 

SECTION 2.3                                                  Timing and Manner
of Enforcement.

 

Notwithstanding the Lenders’ Subordinated Liens, FSA shall have no duty to the
Security Agent, on behalf of the Lenders, as holder of Subordinated Liens as to
the timing or manner of FSA’s exercise of its remedies under the FSAM Insurance
Agreement, which shall be in the discretion of FSA, and pursuant to the terms of
the FSAM Insurance Agreement, failure by FSA to take any action shall not be
deemed a waiver by FSA of any rights thereunder.  Furthermore, FSA shall not be
liable to Security Agent, on behalf of the Lenders, as holder of Subordinated
Liens with respect to any action taken or omitted to be taken by FSA with
respect to the Collateral or any property distributable on or by reason thereof,
other than a failure to deliver any remaining Collateral after the obligations
of FSAM under the FSAM Insurance Agreement have been satisfied in full and the
Lien of FSA has been discharged in accordance with the provisions thereof (the
“Senior Lien Release Date”).  The Security Agent, on behalf of the Lenders,
shall have no right to take action to enforce the Subordinated Liens or exercise
any creditor’s remedies in respect thereof, notwithstanding occurrence of an
Event of Default under the Credit Agreement, unless the Senior Lien Release Date
has occurred or FSA has given its written consent with respect thereto.

 

SECTION 2.4                                                  Amendments.

 

The Lenders agree with FSA that the Lenders shall not enter into any amendment,
modification or supplement to the Credit Agreement without the prior written
consent of FSA, in its sole discretion.   FSA agrees with the Lenders that FSA
shall not enter into any amendment, modification or supplement to the FSAM
Insurance Agreement without the prior written consent of the Lenders, in their
sole discretion.

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES

 

Each of the Lenders, FSA and FSAM represents and warrants as to itself as of the
date hereof that:

 

SECTION 3.1.                                               Due Organization and
Qualification. Such party is duly organized and validly existing under the
jurisdiction of its organization, and is duly qualified to do business, is in
good standing and has obtained all necessary licenses, permits, charters,

 

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registrations and approvals necessary for the performance of its obligations
under this Agreement.

 

SECTION 3.2.                                               Due Authorization. 
The execution, delivery and performance of this Agreement have been duly
authorized by such party and do not require any additional approvals or consents
or other action by or any notice to or filing with any Person, including,
without limitation, any governmental entity.

 

SECTION 3.3.                                               Noncontravention. 
Neither the execution and delivery of this Agreement by such party, the
consummation of the transactions contemplated thereby nor the satisfaction of
the terms and conditions of this Agreement,

 

(a)                                  conflicts with or results in any breach or
violation of any provision of such party’s organization or constitutional
documents or any law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award currently in effect having applicability to such
party or any of its properties, including regulations issued by an
administrative agency or other governmental authority having supervisory powers
over such party; or

 

(b)                                 constitutes a default by such party under or
a breach of any provision of any loan agreement, mortgage, indenture or other
agreement or instrument to which such party is a party or by which it or any of
its properties is or may be bound or affected.

 

SECTION 3.4.                                               Valid and Binding
Obligations.  This Agreement, when executed and delivered by such party, will
constitute the legal, valid and binding obligation of such party, enforceable in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors’ rights generally.

 

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ARTICLE IV

SECURITY INTEREST PROVISIONS

 

SECTION 4.1.                                               Financing Statement. 
FSAM shall do all such acts, and shall execute and deliver to the Security Agent
all such financing statements, certificates, instruments and other documents and
shall do and perform or cause to be done all matters and such other things
necessary or expedient to be done as the Security Agent may reasonably request
from time to time in order to give full effect to this Agreement and for the
purpose of effectively perfecting, maintaining, preserving and enforcing the
Security Agent’s security interest in the Collateral and the benefits intended
to be granted to the Security Agent hereunder.  To the extent permitted by
applicable law, FSAM hereby authorizes the Security Agent to file, in the name
of FSAM or otherwise, Uniform Commercial Code financing statements, including
continuation statements, which the Security Agent in its sole discretion may
deem necessary or appropriate.

 

SECTION 4.2.                                               Account Control
Agreement.

 

(a)                                  The Bank of New York Mellon (f/k/a “The
Bank of New York”) (the “Account Bank”) has established an account in the name
“FSA Asset Management LLC” (such account and any successor account, the
“Securities Account”).  The Account Bank, FSAM and FSA are parties to a
securities account control agreement dated as of July 31, 2003 (the “Existing
Control Agreement”) that among other things evidences FSA’s “control” (within
the meaning of Section 8-106(d)(2) of the UCC) with respect to the “security
entitlements” (within the meaning of the UCC) in the Securities Account.

 

(b)                                 FSA hereby acknowledges that, to the extent
that it holds, or a third party holds on its behalf, physical possession of or
control or as bailee over the Securities Account, the security entitlements
therein or any other Collateral, such possession, control or bailment is also
for the benefit of the Security Agent and the Lenders solely to the extent
required to perfect their security interest in the Securities Account, the
security entitlements therein and such other Collateral.  Nothing in the
preceding sentence shall be construed to impose any duty on FSA (or any third
party acting on its behalf) with respect to the Securities Account, security
entitlements and other Collateral.  The provisions of this Agreement are
intended solely to govern the respective priorities as between the FSA Liens and
the Lenders’ Liens and shall not impose on FSA any obligations in respect of the
disposition of any assets in the Securities Account, any security entitlements
therein or any other Collateral.

 

(c)                                  FSAM, FSA and the Security Agent, on behalf
of the Lenders, each agree to use their commercially reasonable efforts, as soon
as practicable after the date of this Agreement, either to (i) enter into a
custodial and securities account control arrangement with the Account Bank or
any successor thereto as FSAM’s regular custodian, or (ii) amend and restate the
Existing Control Agreement with the Account Bank to reflect the agreements among
such parties set forth herein and the respective priorities as between the FSA
Liens and the Lenders’ Liens.  The Existing Control Agreement prior to any
amendment thereto, any such new custodial and securities account control
arrangement, or any such amendment and restatement of the Existing Control
Agreement shall hereafter be referred to as the “Securities Account Control
Agreement”.  The Securities Account Control Agreement shall include, without
limitation, a covenant that in the event that the Senior Lien Release Date has
occurred but any of the Lender Obligations remain outstanding, that FSA shall
assign “control” (within the meaning of Section

 

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8-106(d)(2) of the UCC) over the Securities Account to the Security Agent, on
behalf of the Lenders.

 

(d)                                 For the avoidance of doubt, unless the
Senior Lien Release Date has occurred and an Event of Default under the Credit
Agreement has occurred and is continuing, the Security Agent agrees that FSAM
shall be entitled to instruct the sale or transfer from the Securities Account
of such Collateral as FSAM may determine necessary for any of the Intended Uses.

 

SECTION 4.3.                                               Security Interest
Representations and Warranties.  FSAM represents, warrants and agrees that:

 

(a)                                  This Agreement creates a valid and
continuing security interest (as defined in the UCC) in the Collateral in favor
of the Security Agent, on behalf of the Lenders, which security interest is
prior to all other Liens (except for any Collateral Posting Lien, any Account
Bank Lien and the FSA Liens), and is enforceable as such as against creditors of
and purchasers from FSAM.  The security interest of the Security Agent, on
behalf of the Lenders, in the Collateral shall, until payment in full of the
obligations and indebtedness secured hereunder and termination of this
Agreement, be a perfected security interest in the Collateral, senior to all
other security interests in the Collateral, except for any Collateral Posting
Lien, any Account Bank Lien and the FSA Liens.

 

(b)                                 FSAM owns the Collateral free and clear of
any lien, claim or encumbrance of any Person other than the FSA Liens, the
Lenders’ Liens or any Permitted Lien.

 

(c)                                  FSAM has caused or will have caused, within
ten days of the date of this Agreement, the filing of all appropriate financing
statements in the proper filing office in the appropriate jurisdictions under
applicable law in order to perfect the security interest in the Collateral
granted to the Security Agent, on behalf of the Lenders, hereunder (and shall
provide a copy of each such statement, with filing numbers noted thereon, to the
Security Agent).

 

(d)                                 Other than the FSA Liens, any Permitted Lien
and the Lenders’ Liens, FSAM has not pledged, assigned, sold, granted a security
interest in, or otherwise conveyed any of the Collateral.  FSAM has not
authorized the filing of and is not aware of any financing statements against
FSAM that include a description of the Collateral, including those financing
statements that have been terminated, other than any financing statement
relating to the FSA Liens, any Permitted Lien and the Lenders’ Liens.

 

(e)                                  None of the “instruments” (as defined in
the UCC) that constitute or evidence the Collateral has any marks or notations
indicating that they have been pledged, assigned or otherwise conveyed to any
Person other than the Security Agent, on behalf of the Lenders, or in connection
with any Permitted Lien.

 

(f)                                    FSAM has received all consents and
approvals required by the terms of the Collateral to the transfer to the
Security Agent, on behalf of the Lenders, its interest and rights in the
Collateral hereunder.

 

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(g)                                 FSAM has not consented to the Account Bank’s
complying with the entitlement orders or other instructions of any Person other
than FSA and the Security Agent, on behalf of the Lenders, as applicable, in
connection with the Securities Account.  All of the Collateral consisting of
“security entitlements” (within the meaning of the UCC) and “financial assets”
(within the meaning of the UCC) has been credited to the Securities Account. 
The securities intermediary for the Securities Account has agreed to treat all
“Collateral” (for this purpose as such term is defined in the Existing Control
Agreement) credited to the Securities Account as “financial assets” (within the
meaning of the UCC).  The Securities Account is a “securities account” (within
the meaning of the UCC).  FSAM acknowledges that the Account Bank as securities
intermediary has agreed, or will agree, upon execution of the Securities Account
Control Agreement pursuant to Section 4.2, to comply with all instructions
originated by either FSA or (in the event the Senior Lien Release Date has
occurred) the Security Agent, on behalf of the Lenders, as applicable, relating
to the Securities Account, without further consent by FSAM.

 

(h)                                 The Collateral consists of (1) “instruments”
(within the meaning of the UCC), (2) “accounts” (within the meaning of the UCC),
(3) “general intangibles” (within the meaning of the UCC), (4) “security
entitlements” (within the meaning of the UCC), (5) “securities accounts” (within
the meaning of the UCC), (6) “deposit accounts” (within the meaning of the UCC)
or (7) “financial assets” (within the meaning of the UCC).

 

(i)                                     With respect to any sale of Collateral
by FSAM from time to time, the amount of consideration being received by FSAM
from the purchaser of such Collateral constitutes reasonably equivalent value
and fair consideration for FSAM’s interest in the Collateral.

 

(j)                                     Each of the foregoing representations:
(i) shall also be deemed made and repeated by FSAM, as applicable, for purposes
of Sections 2.02(i) and 3.01 of the Credit Agreement as of the date as of the
relevant loan and (ii) shall, as applicable, be deemed repeated each time new
assets become part of the Collateral.

 

SECTION 4.4.                                               Further Assurances.
At any time and from time to time, upon the written request of a Lender, and at
the sole expense of FSAM, FSAM will promptly and duly execute and deliver, or
will promptly cause to be executed and delivered, such further instruments and
documents and take such further action as a Lender may reasonably request for
the purpose of obtaining or preserving the full benefits of this Article IV and
of the rights and powers herein granted, including, without limitation, the
execution and delivery of deposit account control agreements and the filing of
any financing or continuation statements under the Uniform Commercial Code in
effect in any jurisdiction with respect to the Liens created hereby.  FSAM also
hereby authorizes each Lender to file any such financing or continuation
statement without the signature of FSAM to the extent permitted by applicable
law.  A carbon, photographic or other reproduction of this Agreement shall be
sufficient as a financing statement for filing in any jurisdiction.  The
Security Agent, on behalf of the Lenders, and each Lender covenants to FSA that
such party will not file any such financing statement until after FSA confirms
the filing of a financing statement perfecting FSA’s security interest in the
Collateral not previously perfected under the Existing Control Agreement.

 

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SECTION 4.5.                                               Release of Security
Interest.

 

(a)                                  Upon termination of the Lender Agreements
and repayment to the Lenders of all amounts owed by FSAM under the Credit
Agreement and the performance of all obligations under the Lender Agreements,
the Security Agent shall release its security interest in any remaining
Collateral; provided that if any payment, or any part thereof, of any of the
Lender Obligations is rescinded or must otherwise be restored or returned by a
Lender upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of FSAM, or upon or as a result of the appointment of a receiver,
intervenor or conservator of, or a trustee or similar officer for FSAM or any
substantial part of its property, or otherwise, the Lender Agreements, all
rights thereunder and the Lenders’ Liens created hereby shall continue to be
effective, or be reinstated, as though such payments had not been made.  The
Security Agent shall be authorized to take any action and make any filings
necessary or desirable to continue or reinstate such Lenders’ Liens.

 

(b)                                 So long as no Event of Default under the
Credit Agreement has occurred and is continuing and no “Notice of Sole Control”
(as such term is defined in the Securities Account Control Agreement) has been
delivered by the Security Agent, the Lenders’ Liens in any Collateral sold by
FSAM from time to time in accordance with the Lender Agreements and the FSAM
Insurance Agreement for one or more of the Intended Uses shall be deemed
released without the need for further action or consent by the Security Agent at
the same time as the FSA Liens in such Collateral are released in connection
with such sale by FSAM (provided that the existence of a Permitted Lien shall
result in the subordination of both the Lenders’ Liens and the FSA Liens in
accordance with Section 5.1 but not the release of such Liens).

 

SECTION 4.6.                                               Changes in Locations,
Name, etc. FSAM shall not (i) change the location of its chief executive
office/chief place of business from that specified in the Lender Agreements,
(ii) change its name, identity or corporate structure (or the equivalent) or
change the location where it maintains its records with respect to the
Collateral or (iii) reorganize or reincorporate under the laws of any other
jurisdiction, unless it shall have given the Security Agent at least 30 days
prior written notice thereof and shall have delivered to the Security Agent all
Uniform Commercial Code financing statements and amendments thereto as the
Security Agent shall request and taken all other reasonable actions deemed
necessary or desirable by the Security Agent to continue the Security Agent’s
perfected status in the Collateral with the same or better priority.

 

ARTICLE V

SUBORDINATION; REMEDIES

 

SECTION 5.1.                                               Subordination to
Permitted Liens.

 

The Lenders, FSA and FSAM agree that the Lenders’ Liens and the FSA Liens,
including any right or security of FSA arising in connection with a Collateral
Posting Lien, shall be expressly made subordinate and junior in priority and
right of enforcement to any Permitted Lien.

 

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SECTION 5.2 Subordination of Lenders’ Liens.

 

(a)           Irrespective of anything contained in any Lender Agreement, the
FSAM Insurance Agreement, the FSA Capital Management Insurance Agreement or the
FSA Capital Markets Insurance Agreement, so long as any Senior Secured
Obligations are outstanding, the Lenders agree that the security interest
created in favor of the Security Agent, on behalf of the Lenders, under this
Agreement, is hereby expressly made subordinate and junior in priority and right
of enforcement to the security interest in the Collateral to the extent for the
benefit of FSA now existing and arising in the future securing the Senior
Secured Obligations.

 

(b)           Following receipt of notice of an Event of Default (as defined in
the FSAM Insurance Agreement) from FSA and prior to the Senior Lien Release
Date, each of the Lenders agrees that it shall exercise any rights, remedies or
powers with respect to the Collateral granted to it under this Agreement, as a
secured party or otherwise, only with the prior consent of FSA.

 

(c)           From and after any Event of Default under the FSAM Insurance
Agreement, all collections, payments, sale proceeds realized on disposition or
other proceeds of the Collateral shall be applied in the following order: 
(i) to the payment of due and unpaid fees and expenses of the Account Bank,
(ii) to the payment of all unpaid principal or interest in respect of the Master
Notes or repurchase price in respect of the Master Agreements, provided that
such payment is applied on the same Business Day to the payment of  a
corresponding amount of unpaid principal and interest in respect of the GICs,
(iii) following the redemption in full of the Master Notes or payment in full of
the repurchase price in respect of the Master Agreements, to the payment of any
and all amounts payable by FSAM under the FSAM Insurance Agreement,
(iv) following the final payment of all amounts owed under the FSAM Insurance
Agreement, to the payment of any and all unpaid principal or interest,
commitment fees, or other amounts due and payable in respect of the Credit
Agreement, and (v) after occurrence of the dates referred to in (iii) and (iv),
to FSAM; provided, that the provisions of this Section 5.2(c) shall not limit
the right of FSAM to use any such proceeds of the Collateral or any borrowings
made under the Credit Agreement for any of the Intended Uses.

 

(d)           If at any time following notice of an Event of Default under the
FSAM Insurance Agreement the Lenders shall have received any payment or
distribution (whether voluntary, involuntary, through the exercise of any rights
of set-off, or otherwise, and whether in cash, property or securities) in excess
of the payments or distributions the Lenders would have received through the
operation of 5.2(c) (such excess payments or distributions being referred to as
“Excess Payments”), then the Lenders shall hold such Excess Payments in trust
for the benefit of FSA, and shall promptly pay over such Excess Payments in the
form received (duly endorsed, if necessary, to FSA) to FSA, for distribution by
FSA pursuant to Section 5.2(c).

 

(e)           Upon full release by FSA of the security interest in all
Collateral pursuant to the terms of the FSAM Insurance Agreement, either (i) FSA
shall transfer and assign “control” (as defined under the UCC) of the Securities
Account under the Securities Account Control Agreement to the Security Agent or
(ii) FSA shall terminate the Securities Account Control Agreement in accordance
with the terms thereunder and the Security Agent and the Account Bank may enter
into a new securities account control agreement giving the Security Agent
“control” (as defined under the UCC) of the Securities Account.

 

11

 

SECTION 5.3                 Effectiveness of Subordination. The subordinations,
agreements and priorities set forth in this Agreement shall remain in full force
and effect, regardless of whether any Person in the future seeks to rescind,
amend, terminate or reform, by litigation or otherwise, its respective
agreements with FSAM.

 

SECTION 5.4                   Obligations Absolute. Nothing herein shall impair,
as between FSAM, on the one hand, and FSA, on the other hand, the obligations of
FSAM, which are irrevocable, unconditional and absolute, to pay to FSA the
amounts due under the FSAM Insurance Agreement from time to time.

 

SECTION 5.5                 Remedies.  The provisions of this Section 5.5 are
subject to the provisions of Section 2.3 hereof.  If any Event of Default under
the Credit Agreement shall occur and be continuing, the Security Agent may
exercise, in addition to all other rights and remedies granted to them under
this Agreement and the Credit Agreement and in any other instrument or agreement
securing, evidencing or relating to the Lender Obligations, all rights and
remedies of a secured party under the Uniform Commercial Code.  Without limiting
the generality of the foregoing, the Security Agent may without demand of
performance or other demand, presentment, protest, advertisement or notice of
any kind (except any notice required by law referred to below) to or upon FSAM
or any other Person (each and all of which demands, presentments, protests,
advertisements and notices are hereby waived), may in such circumstances
forthwith collect, receive, appropriate and realize upon the Collateral, or any
part thereof, and/or may forthwith sell (on a servicing released basis, at the
Security Agent’s option), lease, assign, give option or options to purchase, or
otherwise dispose of and deliver the Collateral or any part thereof (or contract
to do any of the foregoing), in one or more parcels or as an entirety at public
or private sale or sales, at any exchange, broker’s board or office of the
Security Agent or elsewhere upon such terms and conditions as it may deem
advisable and at such prices as it may deem best, for cash or on credit or for
future delivery without assumption of any credit risk. The Security Agent shall
have the right upon any such public sale or sales, and, to the extent permitted
by law, upon any such private sale or sales, to purchase the whole or any part
of the Collateral so sold, free of any right or equity of redemption in FSAM,
which right or equity is hereby waived or released. The Security Agent may, on
one or more occasions, postpone or adjourn any such sale by public announcement
at the time of such sale. The Security Agent shall give FSAM prior or concurrent
notice of any such postponement or adjournment.  FSAM further agrees, at the
Security Agent’s request, to assemble the Collateral and make it available to
the Security Agent at places which the Security Agent shall reasonably select,
whether at FSAM’s premises or elsewhere. The Security Agent shall apply the net
proceeds of any such collection, recovery, receipt, appropriation, realization
or sale, after deducting all reasonable costs and expenses of every kind
incurred therein or incidental to the care or safekeeping of any of the
Collateral or in any way relating to the Collateral or the rights of the
Security Agent hereunder, including without limitation reasonable attorneys’
fees and disbursements, to the payment in whole or in part of the Lender
Obligations, in such order as the Security Agent may elect, and only after such
application and after the payment by the Lenders of any other amount required or
permitted by any provision of law, including without limitation the Uniform
Commercial Code, need the Security Agent account for the surplus, if any, to FSA
or FSAM.  If any notice of a proposed sale or other disposition of Collateral
shall be required by law, such notice shall be deemed reasonable and proper if
given at least 10 days before such sale or other disposition.  FSAM shall remain
liable for any deficiency (plus accrued interest thereon in accordance with the
terms of the Lender Agreement) if the proceeds of any sale or other

 

12

 

disposition of the Collateral are insufficient to pay the Lender Obligations and
the fees and disbursements of any attorneys employed by the Security Agent to
collect such deficiency.

 

SECTION 5.6                 Right to Initiate Judicial Proceedings, etc. The
provisions of this Section 5.6 are subject to the provisions of Section 2.3
hereof.  The Security Agent shall have the right and power to institute and
maintain such suits and proceedings as it may deem appropriate to protect and
enforce the rights vested in it and the Lenders under the Lender Agreements. 
From and after the occurrence of an Event of Default the Security Agent may,
either after entry or without entry, proceed by suit or suits at law or in
equity to enforce such rights and to foreclose upon the Collateral and to sell
all, or from time to time any, of the Collateral under the judgment or decree of
a court of competent jurisdiction.

 

SECTION 5.7                 Remedies Not Exclusive. The provisions of this
Section 5.7 are subject to the provisions of Section 2.3 hereof. (a) No remedy
conferred upon or reserved to the Security Agent or the Lenders herein is
intended to be exclusive of any other remedy or remedies, but every such remedy
shall be cumulative and shall be in addition to every other remedy conferred
herein or now or hereafter existing at law or in equity or by statute.

 

(b)           No delay by or omission of the Security Agent or the Lenders to
exercise any right, remedy or power accruing upon the occurrence and continuance
of any Event of Default shall impair any such right, remedy or power or shall be
construed to be a waiver of any such Event of Default or an acquiescence
therein; and every right, power and remedy given by this Agreement to the
Security Agent may be exercised from time to time and as often as may be deemed
expedient by the Security Agent, subject to the provisions of the Lender
Agreements.

 

(c)           In case the Security Agent shall have proceeded to enforce any
right, remedy or power under this Agreement or any other Lender Agreement and
the proceeding for the enforcement thereof shall have been discontinued or
abandoned for any reason or shall have been determined adversely to the Security
Agent or the Lenders, then and in every such case FSAM, the Security Agent, and
the other Lender shall, subject to any effect of or determination in such
proceeding, severally and respectively be restored to their former positions and
rights hereunder with respect to the Collateral and in all other respects, and
thereafter all rights, remedies and powers of the Security Agent shall continue
as though no such proceeding had been taken.

 

(d)           All rights of action and rights to assert claims upon or under
this Agreement may be enforced by the Security Agent without the possession of
this Agreement, the Credit Agreement or any Note issued thereunder, or any other
document or “instrument” (within the meaning of the UCC) evidencing any of the
Lender Obligations or the production thereof in any trial or other proceeding
relative thereto, and any such suit or proceeding instituted by the Security
Agent shall be brought in its name as Security Agent and any recovery of
judgment shall be held as part of the Collateral.

 

SECTION 5.8                 Security Agent’s Appointment as Attorney-in-Fact

 

(a)           FSAM hereby irrevocably constitutes and appoints the Security
Agent, on behalf of the Lenders, and any officer or agent thereof, with full
power of substitution, as its true

 

13

 

and lawful attorney-in-fact with full irrevocable power and authority in the
place and stead of FSAM, and in the name of FSAM or in its own name, from time
to time in their discretion, for the purpose of, carrying out the terms of the
Credit Agreement and this Agreement, to take any and all appropriate action and
to execute any and all documents and instruments which may be necessary or
desirable to accomplish the purposes of such Agreement; provided, that the
Security Agent hereby agrees that it shall not exercise its rights under this
Section 5.8(a) until (i) the occurrence of the Senior Lien Release Date and
(ii) the occurrence and continuation of any Event of Default under the Credit
Agreement.  Without limiting the generality of the foregoing, FSAM hereby gives
the Security Agent the power and right, on behalf of FSAM, without assent by,
but with notice to, FSAM, if the Senior Lien Release Date has occurred and an
Event of Default has occurred is continuing with respect to the Credit
Agreement, to do the following:

 

(i)            in the name of FSAM, or its own name, or otherwise, to take
possession of and endorse and collect any checks, drafts, notes, acceptances or
other instruments for the payment of moneys due with respect to any other
Collateral and to file any claim or to take any other action or proceeding in
any court of law or equity or otherwise deemed appropriate by the Security Agent
for the purpose of collecting any and all such moneys due under any such
insurance or with respect to any other Collateral whenever payable;

 

(II)           TO PAY OR DISCHARGE TAXES AND LIENS LEVIED OR PLACED ON OR
THREATENED AGAINST THE COLLATERAL; AND

 

(III)          (A) TO DIRECT ANY PARTY LIABLE FOR ANY PAYMENT UNDER ANY
COLLATERAL TO MAKE PAYMENT OF ANY AND ALL MONEYS DUE OR TO BECOME DUE THEREUNDER
DIRECTLY TO THE SECURITY AGENT OR AS THE SECURITY AGENT SHALL DIRECT; (B) TO ASK
OR DEMAND FOR, COLLECT, RECEIVE PAYMENT OF AND RECEIPT FOR, ANY AND ALL MONEYS,
CLAIMS AND OTHER AMOUNTS DUE OR TO BECOME DUE AT ANY TIME IN RESPECT OF OR
ARISING OUT OF ANY COLLATERAL; (C) TO SIGN AND ENDORSE ANY INVOICES,
ASSIGNMENTS, VERIFICATIONS, NOTICES AND OTHER DOCUMENTS IN CONNECTION WITH ANY
OF THE COLLATERAL; (D) TO COMMENCE AND PROSECUTE ANY SUITS, ACTIONS OR
PROCEEDINGS AT LAW OR IN EQUITY IN ANY COURT OF COMPETENT JURISDICTION TO
COLLECT THE COLLATERAL OR ANY THEREOF AND TO ENFORCE ANY OTHER RIGHT IN RESPECT
OF ANY COLLATERAL; (E) TO DEFEND ANY SUIT, ACTION OR PROCEEDING BROUGHT AGAINST
FSAM WITH RESPECT TO ANY COLLATERAL; (F) TO SETTLE, COMPROMISE OR ADJUST ANY
SUIT, ACTION OR PROCEEDING DESCRIBED IN CLAUSE (E) ABOVE AND, IN CONNECTION
THEREWITH, TO GIVE SUCH DISCHARGES OR RELEASES AS THE SECURITY AGENT MAY DEEM
APPROPRIATE; AND (G) GENERALLY, TO SELL, TRANSFER, PLEDGE AND MAKE ANY AGREEMENT
WITH RESPECT TO OR OTHERWISE DEAL WITH ANY OF THE COLLATERAL AS FULLY AND
COMPLETELY AS THOUGH THE SECURITY AGENT WERE THE ABSOLUTE OWNER THEREOF FOR ALL
PURPOSES, AND TO DO, AT THE OPTION OF THE SECURITY AGENT AND AT FSAM’S EXPENSE,
AT ANY TIME, AND FROM TIME TO TIME, ALL ACTS AND THINGS THAT THE SECURITY AGENT
DEEMS NECESSARY TO PROTECT, PRESERVE OR REALIZE UPON THE COLLATERAL AND THE
SECURITY AGENT’S LIENS THEREON AND TO EFFECT THE INTENT OF THE LENDER
AGREEMENTS, ALL AS FULLY AND EFFECTIVELY AS FSAM MIGHT DO; AND

 

(b)           FSAM hereby ratifies all that said attorneys shall lawfully do or
cause to be done by virtue hereof.

 

14

 

(C)           IF THE SENIOR LIEN RELEASE DATE HAS OCCURRED AND AN EVENT OF
DEFAULT HAS OCCURRED AND IS CONTINUING WITH RESPECT TO THE CREDIT AGREEMENT,
FSAM ALSO AUTHORIZES THE SECURITY AGENT, AT ANY TIME AND FROM TIME TO TIME, TO
EXECUTE, IN CONNECTION WITH ANY SALE OF COLLATERAL, ANY ENDORSEMENTS,
ASSIGNMENTS, STOCK POWERS OR OTHER INSTRUMENTS OF CONVEYANCE OR TRANSFER WITH
RESPECT TO THE COLLATERAL.

 

(D)           NOTWITHSTANDING THE FOREGOING, THE POWERS CONFERRED ON THE
SECURITY AGENT, ON BEHALF OF THE LENDERS, AND ITS OFFICERS AND AFFILIATES ARE
SOLELY TO PROTECT THE LENDERS’ INTERESTS IN THE COLLATERAL IN ORDER TO SATISFY
THE LENDER OBLIGATIONS, SHALL NOT BE USED FOR ANY OTHER PURPOSE, AND SHALL NOT
IMPOSE ANY DUTY UPON THE SECURITY AGENT TO EXERCISE ANY SUCH POWERS.  EACH
LENDER SHALL BE ACCOUNTABLE ONLY FOR AMOUNTS THAT IT ACTUALLY RECEIVES AS A
RESULT OF THE EXERCISE OF SUCH POWERS, AND NO LENDER NOR ANY OF ITS OFFICERS,
DIRECTORS, OR EMPLOYEES SHALL BE RESPONSIBLE TO FSAM FOR ANY ACT OR FAILURE TO
ACT HEREUNDER, EXCEPT FOR ITS OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

 

(e)           All powers, authorizations and agencies herein contained with
respect to the Collateral are irrevocable and powers coupled with an interest.

 

SECTION 5.9                 Waiver of Certain Rights. FSAM, to the extent it may
lawfully do so, on behalf of itself and all who may claim through or under it,
including any and all subsequent creditors, vendees, assignees and lienors,
expressly waives and releases any, every and all rights to presentment, demand,
protest or any notice (to the extent permitted by applicable law and except as
specifically provided in this Agreement) of any kind in connection with this
Agreement or any Collateral or to have any marshalling of the Collateral upon
any sale, whether made under any power of sale granted hereunder or any other
agreement or instrument, or pursuant to judicial proceedings or upon any
foreclosure or any enforcement of this Agreement or any other Lender Agreement
and consents and agrees that all the Collateral may at any such sale be offered
and sold as an entirety or in lots or otherwise as the Security Agent may
determine or be directed hereunder.

 

SECTION 5.10               Limitation by Law. All the provisions of this
Article V are intended to be subject to all applicable mandatory provisions of
law which may be controlling in the premises and to be limited to the extent
necessary so that they will not render this Agreement invalid, unenforceable in
whole or in part or not entitled to be recorded, registered, or filed under the
provisions of any applicable law.

 

ARTICLE VI

MISCELLANEOUS PROVISIONS

 

SECTION 6.1.                Binding on Successors, Transferees and Assigns. 
This Agreement shall be binding upon and shall inure to the benefit of and be
enforceable by each party, the Lenders and their respective successors,
transferees and assigns.

 

SECTION 6.2.                Amendments, etc.  No amendment to, waiver of or
consent to departure from the terms of any provision of this Agreement shall be
effective unless the same shall be in writing and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.

 

15

 

SECTION 6.3.                Notices.  All notices and other communications
provided for hereunder shall be in writing (including facsimile communication)
and mailed or telecopied or delivered by electronic transmission or delivered to
it at the address and in the manner set forth in the applicable Lender
Agreement.

 

SECTION 6.4.                No Waiver; Remedies.  No failure on the part of a
party to exercise, and no delay in exercising, any right hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of any right
hereunder preclude any other or further exercise thereof or the exercise of any
other right.  The remedies herein provided are cumulative and not exclusive of
any remedies provided by law.

 

SECTION 6.5.                Captions.  Section captions used in this Agreement
are for convenience of reference only, and shall not affect the construction of
this Agreement.

 

SECTION 6.6.                Severability.  Wherever possible each provision of
this Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be prohibited
by or invalid under such law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.

 

SECTION 6.7.                Governing Law, Entire Agreement, etc.  THIS
AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE
INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS
5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK). 
THIS AGREEMENT CONSTITUTES THE ENTIRE UNDERSTANDING AMONG THE PARTIES HERETO
WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDES ANY PRIOR AGREEMENTS,
WRITTEN OR ORAL, WITH RESPECT THERETO. THE “SECURITIES INTERMEDIARY’S
JURISDICTION” AND THE “BANK’S JURISDICTION” UNDER THE SECURITIES ACCOUNT CONTROL
AGREEMENT SHALL BE THE STATE OF NEW YORK, AND, ACCORDINGLY, THE PARTIES’ RIGHTS
AND OBLIGATIONS CONCERNING THE SECURITIES ACCOUNT AND ALL FINANCIAL ASSETS
CREDITED THERETO AND CASH THEREIN SHALL BE GOVERNED BY THE LAWS OF THE STATE OF
NEW YORK.

 

SECTION 6.8.                Forum Selection and Consent to Jurisdiction.  ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH, THIS
AGREEMENT OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL
OR WRITTEN) OR ACTIONS OF THE PARTIES SHALL BE BROUGHT AND MAINTAINED IN THE
COURTS OF THE STATE OF NEW YORK, NEW YORK COUNTY OR IN THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK.  EACH PARTY HEREBY
EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE
OF NEW YORK, NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AND
IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION
WITH SUCH LITIGATION.  EACH PARTY HERETO IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR

 

16

 

OUTSIDE OF THE STATE OF NEW YORK.  EACH PARTY HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER
MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT
REFERRED TO ABOVE AND ANY CLAIM THAT SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.  TO THE EXTENT THAT ANY PARTY HAS OR HEREAFTER MAY ACQUIRE
ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER
THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF
EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, SUCH PARTY
HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
AGREEMENT.

 

SECTION 6.9.                Waiver of Jury Trial.  EACH PARTY HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF EITHER PARTY.  EACH PARTY
ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION
FOR THIS PROVISION.

 

SECTION 6.10.              Counterparts.  This Agreement may be executed by the
parties hereto in several counterparts, each of which shall be deemed to be an
original and all of which shall constitute together but one and the same
agreement.

 

SECTION 6.11.              Third Party Beneficiaries.  Nothing in this Agreement
shall confer any right, remedy or claim, express or implied, upon any person
other than the parties hereto, and all the terms, covenants, conditions,
promises and agreements contained herein shall be for the sole and exclusive
benefit of the parties hereto and their successors and permitted assigns

 

17

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
and delivered by its officer thereunto as of November 13, 2008.

 

DEXIA CRÉDIT LOCAL

 

FINANCIAL SECURITY ASSURANCE INC.

 

 

 

 

By:

 

/s/ Jean Le Naour

 

By:

 

/s/ Robert P. Cochran

Name:

     Jean Le Naour

 

Name:

     Robert P. Cochran

Title:

   Chief Financial Officer

 

Title:

  Chairman and Chief Executive Officer

 

 

 

 

 

By:

 

/s/ Didier Casas

 

 

 

Name:

    Didier Casas

 

 

 

Title:

   General Secretary

 

 

 

 

Acting together pursuant to a special power of attorney granted by the Board of
Directors of Dexia Crédit Local on November 13th, 2008.

 

DEXIA BANK BELGIUM S.A.

 

FSA ASSET MANAGEMENT LLC

 

 

 

 

By:

 

/s/ Ann De Roeck

 

By:

 

/s/ Guy Cools

Name:

     Ann De Roeck

 

Name:

     Guy Cools

Title:

   Secretary General
  Member of the Management Board

 

Title:

     Managing Director

 

 

 

 

 

 

 

 

 

 

By:

 

/s/ Jean-Francois Martin

 

By:

 

/s/ Bruce Stern

Name:

     Jean-Francois Martin

 

Name:

     Bruce Stern

Title:

   Member of the Management Board

 

Title:

     Managing Director

 

 

 

 

 

 

18